Prime Minister John Key says his lawyer misrepresented him while lobbying another minister about a potential crackdown on the foreign trusts industry.

It emerged last week that Mr Key's personal lawyer, Ken Whitney, had lobbied the Government in 2014 because of concerns that the foreign trusts regime was about to change.

In a letter to then-Revenue Minister Todd McClay in December 2014, Mr Whitney said the Prime Minister had told him the Government had no plans to tighten the rules for the industry.

Speaking to Radio New Zealand this morning, Mr Key said this was a misrepresentation of what he had said.


Mr Key said that he had told his lawyer that he was not aware of any changes being planned by the Inland Revenue Department, and referred him to the minister for further discussion.

Mr Whitney and seven other members of the foreign trusts industry later met with Mr McClay.

Mr Key said he had nothing to do with the Government's decision not to review the way foreign trusts operated. But he understood that it was unrelated to the lobbying by his lawyer and his associates.

The Government opted not to change the rules for foreign trusts because there would be no benefit to New Zealand, he said.

"It was nothing to do with whether they were highly effective in lobbying them, it was what was the higher priority for the tax department," he told Radio New Zealand.

The release of the Panama Papers earlier this month generated new scrutiny of the foreign trusts regime, and prompted a review of the disclosure rules for the secretive trusts.

Asked whether Government should have acted earlier, Mr Key said the Government would have been acting in isolation and it needed to work with other countries on the issue.