Prime Minister John Key has defended his choice of a Government Inquiry into former Justice Minister Judith Collins' dealings with former Serious Fraud Office boss Adam Feeley in the face of Opposition calls for a broader inquiry into Dirty Politics allegations that also takes in the Oravida affair.

Mr Key this afternoon confirmed he had ordered a "Government Inquiry" - a new form of investigation with powers to compel evidence - to investigate matters which prompted Ms Collins' resignation as a minister on Saturday.

Mr Key said he would order an inquiry when a 2011 email surfaced last week in which Whale Oil blogger Cameron Slater said Ms Collins was "gunning" for Mr Feeley.

The email appears to refer to an alleged campaign to discredit Mr Feeley run by Slater and public relations consultant Carrick Graham on behalf of former Hanover Finance director Mark Hotchin, whose affairs were at the time subject to an SFO investigation.


He expected it would take "some weeks" to complete and was "likely to report back after the upcoming election".

"The matters to be investigated in relation to Ms Collins are serious, and I believe it is important the inquiry has sufficient time to conduct a thorough review of those matters before reporting back," he said.

Details of the inquiry's terms of reference and its expected duration would be released once the inquiry's head - a retired judge or QC - was appointed, some time in the next few days.

Mr Key has indicated the inquiry will examine only the issues around Ms Collins' relationship with Mr Feeley.

However the Opposition have pushed for a more serious royal commission to also examine wider allegations about Mr Key's Government's involvement with Slater which were raised in Nicky Hager's book Dirty Politics.

Labour's shadow Attorney-General David Parker this afternoon released wide ranging terms of reference or matters Labour believed an inquiry should examine.

They include central allegations made in Hager's book such as the 2011 release of SIS documents to Slater to embarrass then Labour Leader Phil Goff, the unauthorised access of Labour's online membership records by Mr Key's former senior adviser Jason Ede, and Ms Collins' passing of information about senior public servant Simon Pleasants to Slater.

However, Labour also says the inquiry should examine Ms Collins' conduct in relation to Oravida, the export company her husband works for.


Ms Collins was put on notice by Mr Key earlier this year when it emerged she had met with Oravida bosses and a Chinese border official during a ministerial visit to China last year.

Labour says an inquiry should examine whether her family's financial interest were brought into conflict with her ministerial duties and whether that potential conflict of interest was a breach of the cabinet manual.

Mr Parker told reporters this afternoon that the Oravida issue had been included because "it's part of a pattern isn't it?"

"I think there's plenty of unanswered questions there."

He said Mr Key was trying to "close down" the Dirty Politics furore "by creating a process in respect of that single issue" around the SFO.

"I think that particular issue is likely to be investigated by the police and the broader issues relating to the conduct of Government and whether there's a new style of Government that has arisen which uses government official information in a way that we haven't seen before."

A letter setting out Labour's arguments in favour of a broader inquiry which included its proposed terms of reference was sent to Mr Key and other party leaders by Labour David Cunliffe yesterday.

New Zealand First Leader Winston Peters this morning said a wide ranging royal commission of inquiry into Dirty Politics allegations would be a "bottom line" in any post-election talks for his party.

Mr Key has said a broader inquiry into the Dirty Politics allegations isn't warranted and the Opposition push for one was politically motivated.

Speaking to reporters in Christchurch this afternoon he said the difference between a Government Inquiry and a royal commission were "a bit semantic".

"The powers of the inquiry we are proposing to establish are identical to the ones of a royal commission. The only difference is actually who appoints the actual people, and who it reports to.

"The real powers of a Government inquiry as we're proposing are very thorough, very broad and no different to a royal commission."

He said Mr Peters had "lots of bottom lines".

"This is just another one. As I've said before, I'm not going to get into bottom lines prior to an election. We'll go and talk to political parties afterwards."

He suggested those calling for a wider inquiry should be careful what they wished for.

"There are lots and lots of different players involved in this. And, push come to a shove, maybe that wouldn't be what [Peters] would want.

"The blogger in question has said that half the Labour caucus is involved. To cast a wide net across the media, realistically we all just need to take our breath for a moment here.
There's a specific allegation about a particular minister. She utterly refutes it and her position is supported by the State Services Commissioner. But I, as a Prime Minister, have to get an answer to that question and I'm setting up a Government inquiry."

A Government Inquiry has powers to order people to give evidence and produce documents and other evidence or face conviction and a $10,000 fine if they refuse.

Labour has now also filed a complaint with police in relation to Dirty Politics allegations.