Key Points:

National leader John Key has admitted he should have disclosed the full extent of his Tranz Rail shareholding earlier, but has denied using his parliamentary position for personal profit.

Mr Key today fronted media on the issue on his way to National's weekly caucus meeting after Finance Minister Michael Cullen yesterday accused him of lying about his shares.

Mr Key failed to disclose his shareholding, which Labour says amounted to a conflict of interest, when he was National's associate transport spokesman in 2002 and 2003.

That was because he asked parliamentary questions about the Government's planned buyback of the country's rail tracks while holding the shares.

In an interview on One News last night, he first said the most shares he ever held was 50,000 and then quickly changed that to 100,000.

Mr Key today said he did not know about the additional shares when he answered questions in July, but found out later on and should have disclosed it.

"I'm prepared to accept and I fully accept that ... when I found out later on that there was a bigger shareholding even though the story had politically passed in the media, I should have come back and said that."

He said the number of shares varied at different times and were managed by a broker who had authority to act without referring back to the trust.

He said all the shares were owned by the trust and information on the share register that he had personally bought 50,000 shares was incorrect.

He said he did not personally gain from the shares and when rail started becoming a hot political issue he sold them at a loss.

Labour has tried to paint Mr Key as a hypocrite for criticising New Zealand First leader Winston Peters, when he himself failed to disclose a pecuniary interest.

But Mr Key rejected that. He said his share information was on the public share register, there was no Register of Pecuniary Interests for MPs until 2005, and whether he owned 30,000 or 100,000 shares was irrelevant to conflict of interest questions.

Questioned on the issue before he was aware the information had been released yesterday, Mr Key told One News his shareholding ranged between 25,000 and 50,000 shares up until June 2003.

It wasn't until pressed on the issue he admitted there were more shares.

"Actually maybe 100,000 from memory, sometimes 50,000, sometimes 100,000, yep," he said.

"Yeah, sorry, there was 100,000 in total."

Today Mr Key said his initial reaction to the question was a "genuine mistake", but New Zealanders could still trust him.

"I'm a person who operates in an open way. If I've made a mistake I'll front up and say I've made mistake."

Mr Key said he had acted in 2003 to get rid of all his shares.

Dr Cullen said Mr Key's failure to declare his shareholding to Parliament was unethical and his failure to accurately disclose the number of shares he owned showed he couldn't be trusted.

Mr Key said Dr Cullen's comments were the start of a "desperate smear campaign" against him.

He said Labour had sat on the issue and only wheeled it out yesterday to distract from the privileges report which found Mr Peters in contempt of Parliament.

- NZPA