Labour Leader David Shearer has accused the Government of "extraordinary arrogance" for refusing to halt negotiations with SkyCity over an international convention centre while an investigation into how the deal was brokered is held.

The Auditor-General's office this morning announced an inquiry into the way the Government sought proposals for the Auckland convention centre.

The Government is currently negotiating a deal that would see the casino operator build the $350 million centre in exchange for changes to gambling laws that would give it more pokie machines and other concessions worth about $42 million a year.

Labour and the Greens, who made the original request for and inquiry today called for those investigations to be suspended until the inquiry is complete.


But Economic Development Minister Steven Joyce said the Government was "very relaxed" about the inquiry and negotiations would continue.

"It doesn't change anything at all, we're confident of our position".

But Mr Shearer said Mr Joyce was being "extraordinarily arrogant in continuing to run this process while an inquiry is going on".

"To me it beggars belief that he can continue to do this while an inquiry is going on."

Not only should negotiations be put on hold until the inquiry was complete, but the tender should be reopened begun again from scratch.

He said there was "obviously something dodgy" around the deal "otherwise the Auditor General wouldn't take a look".

"There's certainly a lot of doubt and the doubt is all around John Key and the way John Key has handled it behind closed doors right out of the tender process."

Mr Key has acknowledged he approached SkyCity to make a bid to build the centre but has rejected claims he had an unfair amount of influence over the tender process.


This afternoon he said he welcomed the inquiry and was "delighted" with it.

"I have absolutely no concerns about the outcome."

The Opposition had made a number of statements about the deal that were factually incorrect.

"The great thing about this is the Auditor General will be able to demonstrate to everybody those statements are incorrect."

He also said the inquiry was not into himself or his Government's role in the deal but the Ministry of Economic Development, "and the process they went through in terms of the tenders".

But Greens co-leader Metiria Turei said there were serious questions for Mr Key.


"Is he signing any deals with SkyCity that could bring the Government under some kind of liability in the future if the process is found to be wanting?

"If there has been some dodgy dealings in the process will the bidders who missed out take some kind of legal action against the public and will that mean some implication for public funding?

"This is serious and he must take it seriously."

In a statement to the stock market, SkyCity said it would co-operate fully with the Auditor-General as and when required.

"From SkyCity's perspective, we were involved in a competitive selection process, responding to the governments request for expressions of interest to develop a national convention centre," SkyCity general counsel Peter Treacy.

Auditor-General Lyn Provost will not be involved in the inquiry as she has a small shareholding in SkyCity.


The inquiry will examine:

* The overall process for seeking and assessing proposals for an international convention centre

* The adequacy of the assessment of the likely costs and benefits of each proposal

* Any other matters the auditor-general considers it desirable to report on.