Mr Key denies that, saying he was never part of a support and advisory team to help National Party insider Bronwyn Pullar in her attempt to claim up to $14 million.
The letter from private insurer Sovereign, leaked to TVNZ's Close Up programme, claims Mr Key was among 28 high-profile people who backed Ms Pullar in her claim.
Ms Pullar's fight for compensation over a 2002 cycling injury has already caused headaches for the National Party, drawing in former president Michelle Boag and leading to the resignation of senior minister Nick Smith.
Ms Boag acted as a support person at a meeting with senior ACC managers in which Ms Pullar allegedly threatened to go public with information she accidentally received about 6700 ACC claims.
At the time, she had already received an income protection payment from Sovereign, understood to be more than $1 million.
The letter from Sovereign, sent to Ms Boag before Ms Pullar's claim was settled in 2007, names 28 people as part of a claims support and advisory team for Ms Pullar.
Among them are Mr Key, former National prime minister Jenny Shipley, Sir Selwyn Cushing and National Party minister Wayne Mapp.
In a statement to TVNZ, Mr Key said he had not been involved in any claims support or advisory team for Ms Pullar.
"The claim in the letter that I was part of such a team in 2007, or indeed any other time, is wrong.''
In the letter, Sovereign said Ms Pullar's claim of up to $14m was "greatly in excess'' of her entitlement.
At the time of the letter, Mr Key was leader of the opposition.
Ms Boag told TVNZ tonight she could not remember any letter and could not recall writing to Sovereign herself.
She said the list of prominent people was Sovereign's definition and she had not supplied names.
Sir Selwyn told TVNZ he had supported Ms Pullar while Dr Mapp said he "simply facilitated some meetings'' about Ms Pullar's claim which had led to a settlement.
He was unaware who put together the list of supporters and had not seen the letter from Sovereign.
"What I did was assist Bronwyn, who was assisted by Michelle, for her to be able to get compensation for her injuries, based on her insurance policy that she was paying for,'' he said.
Dame Jenny said she was not aware of any list and had not attended any meetings.
The Green Party tonight called for an independent inquiry into the affair.
Co-leader Russel Norman said the letter raised serious questions over whether Mr Key has declared his full involvement in the case.
"If it is true that the Prime Minister has no knowledge of being named in the Sovereign letter, or that his support of Bronwyn Pullar was as he has previously described it, then he has nothing to fear from an independent inquiry.''
Dr Norman said the letter also raised the question of whether, in his own investigation into Dr Smith's conflict of interest, Mr Key himself had a conflict of interest.
Dr Smith stood down from his ministerial positions last week after it was revealed he wrote letters to ACC in support of Ms Pullar while he was minister in charge of that portfolio.
"An independent inquiry would establish if the Prime Minister had a conflict of interest at the point that he investigated Nick Smith,'' Dr Norman said.
