Key Points:

A trip to Melbourne by Labour Party president Mike Williams to try to link National leader John Key to historic fraudulent foreign exchange deals was paid for by the party, Prime Minister Helen Clark admitted today.

Mr Williams spent several days examining documents surrounding the so-called H-Fee - two payments totalling A$66.5 million ($75 million) to Equiticorp funnelled via sham foreign exchange transactions in 1988.

The documents, which included a signature on a cheque which bore a striking resemblance to Mr Key's, did not provide the evidence sought.

The cheque was actually signed by an Australian-based executive of the firm Mr Key worked for.

The Labour Party has copped public criticism about wasting time and money in apparent attempts to dig dirt on Mr Key.

Helen Clark said yesterday Mr Williams paid for the Melbourne excursion himself, but today said on Newstalk ZB that she had since been updated on the situation.

"He (Mr Williams) told me he paid for it, he now tells me he got reimbursed by the party..." she said.

Helen Clark said she didn't know how much in terms of resources from the party's research unit was focused on gathering information about the issue.

"The National Party research unit has been trawling over my past for 27-years, so there's nothing new about that."

Helen Clark said Mr Williams considered there were "questions to be answered" over the H-Fee issue.

She said she considered that to be the case herself, but wouldn't be drawn further.

"I'm not into the issue enough to even go through the questions."

Mr Key yesterday dismissed suggestions that Helen Clark was detached from the issue.

"Of course the Prime Minister was involved. She is in daily contact with her president. You think she would have noticed that he is out of the country for a few days and asked where he was," Mr Key said.

"The Labour Party and the Labour Government are focused on digging the dirt on me."

Herald journalist Eugene Bingham travelled to Australia this week to inspect the documents as well.

Helen Clark said she made no judgment on the issue but noted the Herald's interest and coverage on the matter.

She said the taxpayer-funded Labour Party parliamentary research unit had assisted with the investigation, but not travelled to Melbourne.

Asked if Mr Key misled the public, Helen Clark said: "I've made no judgment on it one way or the other."

Helen Clark said she had "absolutely not" looked at the documents involved.

"The whole business which occurred 20 years ago is incredibly complex and I would not pretend for one moment that I had my mind around any of it and nor do I intend to devote time to it. I am very focused on leading New Zealand through tough economic times."

There is no evidence to link Mr Key with the fraudulent H-fee transactions that resulted in Equiticorp head Allan Hawkins and Elders executive Ken Jarrett going to prison, but he worked closely with someone who was involved in the second of two transactions.

The first was done at Australian-based Elders IXL in January 1988.

But the second one was done with the help of Mr Key's old firm Elders Merchant Finance in Wellington on September 7, 1988, one week after Mr Key left to join Bankers Trust in Auckland.

Mr Key's replacement at Elders, Paul Richards, helped with the transactions but was given immunity from prosecution.

Mr Key acknowledges that he was at a lunch with Mr Richards on August 31, the day he left the firm, when Mr Richards said he had to leave for a time to go and meet Mr Jarrett - but he did not say what about.

But Mr Key said yesterday that Mr Richards had never sought his advice on the transactions and that he had had no involvement or knowledge of them whatsoever.

Mr Key subsequently gave Mr Richards a job at Bankers Trust in Auckland and he now lives in the United States.

Mr Key was backed up by Charles Sturt, the former head of the Serious Fraud Office, who interviewed Mr Key about the transactions, and said Mr Key was never involved.

"John Key was simply one of scores of innocent people interviewed by the SFO in this investigation."

There was "not a scintilla of evidence" linking him to anything untoward, Mr Sturt said.

- NZPA, NZ HERALD STAFF