Mr Key's office said he was speaking specifically about allegations the GCSB deleted a video of him talking about Dotcom inside its top secret building. "He stands by what he said,'' said a spokeswoman.
The claim that evidence was deleted has brought fresh calls for an independent inquiry into the agency, described today by the Labour and Green parties as operating outside the law.
Green Party co-leader Russel Norman said: "If it is true, then they are a rogue agency operating in contempt of the law and courts.''
Information sought as part of a court process is meant to be preserved - and doing otherwise was "basic contempt of court'', said Mr Norman.
BREAKING NEWS: The GCSB spy agency seems to have deleted evidence relevant to my case against the GCSB for illegally spying on NZ residents.
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 this year's 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''.
Speaking in Auckland later, Mr Key said Dotcom was "completely and utterly wrong''.
"I can't talk specifically about Mr Dotcom's evidence because it's before the courts. But what I can say is the claims that he's making that there's some kind of inconsistency with how we treat things is quite wrong,'' he said.
"Essentially, legal documents that are created by GCSB are held in their system and archived for evidence. Raw intelligence has to actually, by law, age off the system if it's no longer relevant or required,'' he said.
"The great irony is, if you cast your mind back to the GCSB debate, there were many people arguing that the GCSB shouldn't hold on to data for as along as it does. Now these same people seem to be saying `ah well, we should be holding onto this data forever'. They're just trying to join dots that cannot be joined and confuse people.''
