Lambs born after the airfreighting of 900 pregnant ewes to a businessman's Saudi farm suffered an extremely high death rate, it has been claimed.
About $1.5 million in taxpayer money was spent to fly the ewes to Hamood Al Ali Khalaf's farm in Saudi Arabia.
National has come under intense pressure over its decision to spend more than $11 million on the private farm deal, partly to resolve a dispute and clear the way for a regional free trade deal.
Tonight One News reported that not long after the ewes' arrival a vet and other staff were rushed over from New Zealand.
More than 1100 lambs should have been born, One News claimed, but fewer than 300 were found alive.
Meanwhile, full detail in documents relating to the controversial deal will be revealed if Labour's appeal to the Ombudsman is successful.
The party's export and trade spokesman David Parker took the unusual step of handing out Cabinet papers under the previous Labour Government this afternoon in order to "call the Prime Minister's bluff".
Foreign Minister Murray McCully has blamed the previous Labour Government for antagonising Mr Al Khalaf to the point he took advice that he could sue for $30 million.
The spending on the farm was a way to placate the businessman and clear the way for a stalled regional free trade deal, he argued.
Mr Al Khalaf lost millions of dollars when the ban was implemented under the previous Labour Government, and then subsequently extended by National.
Mr McCully has said that Labour had misled Mr Al Khalaf about the prospects of a halt on sheep exports for slaughter being overturned, before legislation was amended to implement a permanent ban.
Prime Minister John Key has also hinted that Cabinet papers would emerge to embarrass Labour over its criticisms of National's commercial solution to settle the dispute.
Mr Parker has subsequently attempted to follow procedure and have two old Labour Cabinet documents released through Parliament, but has been blocked by National.
Today he handed out the 2007 documents, with redactions that had been made through the Cabinet office after consultation with officials from relevant government departments.
There is no evidence that any consideration was given to a commercial solution or the need for one in order to placate investors including Mr Al Khalaf.
The papers do note that reaction from investors and trading partners, including Saudi Arabia, would be a risk of a total ban.
"A bilateral Arrangement has also been under negotiation to allow for the resumption of live sheep exports on a commercial basis, and the Saudis have received good-faith assurances from New Zealand to this end," one of the papers co-signed by former Agriculture Minister Jim Anderton noted.
Mr Key stuck to his criticism that Labour, and specifically former trade minister Phil Goff, had created the problem.
That was angrily denied by Mr Goff, who said National had been caught out.
"I said to the Saudis in 2006 if we can resolve this so that we meet proper animal welfare standards, then the resumption of live exports could occur. Subsequently the international issue became the nature of slaughter of animals being exported live...the examples were appalling.
"Our Cabinet made the decision that not only were the welfare conditions of the sheep during transport of importance, but also the manner of slaughter once they arrived in the country of destination."
On the Prime Minister's hints that the redactions in the document were important, Mr Parker said he would ask the Ombudsman to recommend unredacted versions.