Ex-ministers to Key: Prove Saudi claim

Murray McCully has gone "troppo" and John Key has "jetted" him out of the country for three weeks to avoid answering questions, Labour leader Andrew Little said. Photo / NZME.

Goff and Anderton challenge PM to show evidence for hints over $10m farm deal.

Former ministers Phil Goff and Jim Anderton are challenging Prime Minister John Key to release any documents he has suggesting the Labour-Progressive Government considered settling a grievance with Saudi investor Hamood Al Ali Khalaf.

They say they would welcome such a release because they have no idea what Mr Key was hinting at in Parliament yesterday.

Mr Key launched a staunch defence of Foreign Minister Murray McCully, who got Cabinet approval in 2013 to spend $10 million to settle a grievance with Mr Al Khalaf, a businessman left out of pocket when live sheep shipments were banned on animal welfare grounds.

Answering questions from Labour leader Andrew Little, Mr Key said Mr McCully had done an outstanding job.

"He has looked for a commercial solution - and those might be words that will ring true soon.

"He has acknowledged that there was a problem - those words might ring true soon.

"He has done the right thing to remove an irritant to the relationship with Saudi Arabia - those words might ring true soon."

Mr McCully's Cabinet paper released last week said the grievance had been a significant impediment to New Zealand's relationship with Saudi Arabia and a free trade deal.

It notes that an initial $4 million was to recognise the "settlement of the long-running dispute".

Opposition parties have called it a bribe because of statements about the obligation on the Saudi end of the deal "to use their best offices to connect New Zealand Government and trade interests with key government and commercial decision-makers in Saudi Arabia".

"There will be strong incentives for the Saudi parties to promote the ratification of the NZ [Gulf Co-operation Council] FTA ..."

Mr Key's spokeswoman said he would not release any documents but the Herald has put in requests under the Official Information Act.

Mr Little said Mr McCully had gone "troppo" and Mr Key had "jetted" him out of the country for three weeks to avoid answering questions.

Mr McCully is in the Middle East meeting the leaders of Egypt, Israel and the Palestinian Authority.