Dotcom quoted Crown lawyers as saying "some communications have automatically aged off. We propose to include ... those communications which are still recoverable".
He said: "Look at Key's wobbly spin of the facts, trying to explain this away as yet another misunderstanding. This Government has serially broken the law in my case and now they did it again.
Dotcom, who is becoming politically active through his Internet Party, said: "I hope the public can see that and will kick him out of government at the next election. Send him back to his buddies in America, where government law breaking and overreach has become the normality."
He said an independent inquiry into the case would see Mr Key and others "in court over the injustice they have done to me and my family".
Mr Key said the information was "raw intelligence" which was required by law to be deleted.
"Essentially, legal documents that are created by GCSB are held in their system and archived forever. Raw intelligence has to actually, by law, age off the system if it's no longer relevant or required."
He also rejected any links between the deletion of the material and his comments to Parliament about archiving material. He was responding to claims the GCSB had deleted a video recording which was politically damaging, which he said never existed.
Green Party co-leader Russel Norman said information sought as part of a court process is meant to be preserved - and doing otherwise was "basic contempt of court".
"If it is true, then they are a rogue agency operating in contempt of the law and courts."
He said Mr Key was attempting to distance himself from his statement in Parliament, saying the comments were made "in the most general terms". "He has misled the House."
He said an independent inquiry into the GCSB would be part of an coalition negotiations after the election.
Labour associate spokesman on security issues Grant Robertson said he was concerned about the implications of Dotcom's claims.
"If true, it speaks of an agency that has operated where they don't believe they need to pay attention to the law." He said people would ask why they should "trust an agency like this if it's not going to comply with the law".
He said Mr Key needed to "come clean" about what he knew about the deleted information.
The inquiry into the GCSB by former Cabinet secretary Rebecca Kitteridge, the incoming Security Intelligence Service boss, referred to material being "aged off" its systems.
The process was referred to when detailing how the GCSB dealt with failure to follow its own law or rules. She wrote "the information concerning the target will be deleted within GCSB if it has not already 'aged off' the system".
