Judith Collins has denied a claim by Winston Peters that one of her loyalists approached him to ask if he could work with her after the election if he could not agree with a deal with Mr Key.
The New Zealand First leader told Radio New Zealand a person associated with Ms Collins "sidled up" to him informally.
"He bumped into me - that was clear as daylight."
The meeting happened in Wellington before the Oravida scandal broke, he said.
The person was a "passing acquaintance" who did not work in Parliament, Mr Peters said.
"I was disturbed that that was the nature of politics they were pursuing."
Mr Peters said he did not say anything to the person. It sounded like a plot to roll Mr Key after the election, he said.
But Mrs Collins says Mr Peters' claims are untrue.
"I have never approached him and never authorised anyone to approach him. He would be the last person in the world I would ever want to approach."
No staff member of hers would be in any doubt of her opinion of Mr Peters and his politics, she said.
Prime Minister John Key says it would be "probably" be a sackable offence for Ms Collins if Winston Peters is telling the truth about an approach from one of her supporters to him, but he believes Ms Collins' version of the story.
"I'm not interested in calling people names and Judith Collins would know better than me. I suspect Winston Peters is trying to get himself into the news. He's buying himself a story and that's what small parties do."
He said he had not sought an assurance from Ms Collins, but she had told him Peters was wrong.
He said it had not changed National's willingness to work with Mr Peters if NZ First was needed for a coalition.
Nor did he believe that was unlikely given Mr Peters' attacks on National. "Those of you around in 1996 saw Mr Peters spend the campaign bagging Jim Bolger and then he formed a government with him."
The accusation comes as New Zealanders appear to be evenly divided over whether Justice Minister Judith Collins' head should roll for her part in the Dirty Politics scandal, a Herald-DigiPoll survey has found.
Hager's expose of an alleged dirty tricks campaign run in co-operation between Whale Oil blogger Cameron Slater and Prime Minister John Key's office also fingered Mrs Collins for passing on the identity of a public servant suspected of aiding Labour's attacks on the Government in 2011.
No apology to public servant
Mrs Collins refused to apologise to Mr Pleasants and would not comment on whether she had breached the Cabinet manual by disclosing Mr Pleasants' details.
"What has been passed to Mr Slater that I am accused of doing is nothing more than is on a business card," she told Radio New Zealand this morning.
Ms Collins said if Mr Pleasants has been the target of death threats, then that amounted to cyber-bullying.
As Justice Minister she has championed laws against cyber-bullying.But she said she had not been a party to cyber-bullying Mr Pleasants any more than the Labour Party was in the cyber-bullying she alleged took place on the left-leaning blog The Standard.
She said being prime minister was "not one of my aspirations because, frankly, it's a hell of a job".
The impact of Dirty Politics
The Herald-DigiPoll survey found New Zealanders divided over Mrs Collins' role in Dirty Politics.
And while a slim majority believe the saturation media coverage of the claims in Nicky Hager's book was justified, a slightly larger majority say the furore was either unjustified or that it's time to move on.
Mr Key has conceded Ms Collins, who was already on thin ice after the Oravida conflict-of-interest row, was "unwise" to have done that. Forty-six per cent of 750 New Zealanders surveyed over the week to Wednesday agreed her actions were more bad behaviour and she should resign. A combined 45.9 per cent said it was either unwise but not a sacking offence or she had done nothing wrong.
The Herald-DigiPoll survey is the latest of several polls suggesting that people think she should go but Mr Key yesterday stood by his decision to retain her. "That's my call as Prime Minister ... If the situation changes I reserve the right to look at that."
Less than a third of people agree with Mr Key's claim they were not interested in coverage of what he dismissed as a "left-wing smear campaign". Just over 53 per cent said the media coverage was justified while just over 30 per cent said it was not.