Prime Minister John Key says an American public relations company on a permanent retainer arranged his appearance on David Letterman's show two years ago.

Mr Key, who is Minister of Tourism, went on the prime time show to promote New Zealand as a destination while he was visiting the United States.

TV3 reported tonight he was invited only because Tourism New Zealand paid a public relations company a $10,000 retainer to raise New Zealand's profile.

Mr Key said at his post-cabinet press conference the company was on a permanent retainer and worked on numerous projects.


"There was no payment to Letterman. Tourism New Zealand have a public relations company, they're on a retainer, they pay them every month, irrelevant of what I do," he said.

"Apparently the Letterman show was one of the projects they worked on. We were invited on the show. Obviously people pushed for that, that's how it works."

Mr Key said he was presented with the opportunity to go on the show.

"As Minister of Tourism, it was a good thing to do. In my view it promoted New Zealand," he said.

"But there wasn't a payment made to Letterman, there wasn't a payment made to get us on the show."