Defence Minister Gerry Brownlee says the New Zealand Defence Force's failed legal battle against journalist Jon Stephenson, which has cost more than $1 million and left a key witness seeking refuge in New Zealand, is "somewhat unsatisfactory".

The Herald revealed today that an Afghan police commander, whose evidence did not survive scrutiny in Stephenson's defamation trial, had not returned to Afghanistan after the case was settled and was now seeking asylum in New Zealand.

Defence Debacle: Afghan witness still in NZ

Mr Brownlee refused to comment on the specifics of the matter today, citing a confidential agreement the Defence Force signed when it made an out-of-court settlement with Stephenson in December 2014.


"The whole situation seems somewhat unsatisfactory, but I can't make further comment as a confidential settlement was reached with Mr Stephenson, and I don't wish to breach his rights," he said.

The minister was asked whether he was happy with the way the matter had played out, whether there would be an inquiry and whether the Immigration Service would be informed that the commander's evidence appeared not to have stood up to scrutiny.

He referred further questions to the Defence Force but warned that they would not be able to "add a great deal" because of legal privilege.

Stephenson sued the NZDF chief at the time, Lieutenant General Rhys Jones, and the force, claiming he was defamed in a press release General Jones issued in 2011 in response to a Metro magazine article by Stephenson about the handling of detainees in Afghanistan.

The article raised whether SAS troops had passed prisoners to authorities known to torture.

After its publication, Prime Minister John Key questioned Stephenson's credibility.

"I've got no reason for NZDF to be lying, and I've found [Stephenson] myself personally not to be credible," he said.

Mr Key stood by those comments today, but did not go into detail: "I've got my own experiences and I'll keep hem to myself."

He said it would be "concerning" if the Afghan commander used the trial as a means of resettling in New Zealand, but added: "You'll have to take it up with the minister".

Earlier, Labour's defence spokesman Phil Goff said that the Defence Force needed to explain why it had wasted $1 million on a defamation case.

A failed challenge to the credibility of journalist Jon Stephenson by the Defence Force has blown up in its face, cost taxpayers more than $1 million and resulted in an Afghan police unit commander whose evidence did not survive scrutiny seeking to stay in New Zealand as a refugee.

Mr Goff said that the NZDF was either guilty of a genuine error or of smearing Stephenson.

"Both the Defence Force and the Prime Minister attacked Stephenson's credibility," he said.

"What we need to know is was that a result of a genuine mistake as a result of advice received? Or in a more sinister manner, was it a smear tactic to undermine Stephenson's questions and criticism?"

I think the public must have an answer to that. It is literally a million dollar question.

"If politicians and officials start attacking a person and they are doing that on a basis that they know to be wrong, then that's resignation territory."

If the Defence Force was wrongly advised and made a genuine error, it still needed to apologise to the journalist, Mr Goff said.

The Labour MP also questioned the decision to fly the Afghan commander to New Zealand for the court case, saying that he could have been cross-examined by video link.

Green Party defence spokesman Kennedy Graham said the NZDF's defamation case had become "something of a shambles".

The public had now stumped up $1 million for a court case "that should never have happened in the first place", he said.

Dr Graham said he was not opposed to the Defence Force's decision to fly the Afghan commander to New Zealand to testify in the case.

"But what's not appropriate is that the whole trial erodes from the attacking of the personal credibility of a very well-reputed New Zealand journalist.

"And that is a pattern of behaviour that the Prime Minister has led this Government on, including the Nicky Hager issue in late 2014."