Mr Key lodged a complaint with the police who - following an investigation - issued a warning to Ambrose over the recording which Ambrose maintains was not deliberate.
The investigation saw the offices of media organisations searched by police and the content of Mr Key and Mr Banks' conversation widely discussed.
Today, Mr Key brushed off the significance of Ambrose's legal action.
"It's not coming back to haunt me, it is what it is. I have no intentions of settling and absolutely no intentions of resiling from anything I've said."
Ambrose is seeking $500,000 in aggravated damages relating to comments made by Mr Key at a media conference three days after the cup of tea meeting, Radio NZ reported.
He is also seeking a further $500,000 in relation to comments Mr Key made in an interview on TV3's Firstline the following day.
The day after that, Mr Key made further comments to journalists at an Upper Hutt media conference over which Ambrose is seeking a further $250,000.
Ambrose says he lost tens of thousands of dollars as work dried up during the scandal.
Speaking from Port Vila this morning Ambrose said he would not be commenting and directed the Herald to his Auckland lawyers.