Prime Minister John Key is standing by his Foreign Affairs Minister in the face of calls for him to be stood down while the Auditor General investigates the controversial Saudi sheep farm deal.
Murray McCully was the driving force behind the deal, which opposition parties have said was an obvious bribe.
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New Zealand taxpayers paid $11 million to send 900 of its sheep from the fields to the desert. Photo: 123RF
More than $11 million of taxpayer money has been spent on setting up a sheep farm in the Saudi Arabian desert to placate a wealthy businessman, who was angry at New Zealand's ban on sheep exports for slaughter.
The Auditor General has previously raised concerns about the deal, saying the business case for the farm was weak.
On Tuesday, Lyn Provost formally launched an investigation into the controversial Agrihub, after requests from opposition parties and a petition of more than 10,000 people.
Labour trade spokesperson David Parker said spending $11 million on a farm in the desert had never made commercial sense, so there was clearly an ulterior motive.
Listen to David Parker
Labour trade spokesperson David Parker. Photo: RNZ / Diego Opatowski
"There are so many references in the documents to [the Saudi businessman] Mr Al-Khalaf and his agent Mr Assaf saying that this was for compensation.
"There are the obvious references by Mr McCully saying the words 'compensation' could not be referred to, because that would involve a plethora of lawyers and bureaucrats.
"I think it's that which the Auditor General needs to get to the bottom of."
New Zealand First leader Winston Peters said the whole Saudi farm deal stank to high heaven.
"Frankly, the deal looks shonky every which way you look at it - the public explanations by the ministers have been less than honest, less than forthcoming.
"We need to see the legal opinion on which so many decisions were purported to have been made, and also were central to press statements made to the media in this country, and so the sooner we get to the bottom of this the better."
Green Party co-leader James Shaw. Photo: RNZ / Alexander Robertson
Green Party co-leader James Shaw said Mr McCully should be stood down while the investigation was under way.
"This case has got McCully's fingerprints all over it. It's not the first time he's been caught making illegal payments, his position as a minister of the crown is kind of untenable, given what we do know, so we think that it would be fair enough for him to be stood down."
The Labour Party also believed the minister should be stood down.
Mr Parker said the stakes were high for Mr McCully.
"Well, if Mr McCully has misrepresented the position to any of the agencies of Government, including in the Auditor General or the Treasury, or caused documents not to properly reflect what was happened, then the consequences of that should be most serious for Mr McCully."
Foreign Minister Murray McCully has been out of the country throughout the scandal. Photo: RNZ
A spokesperson for Mr Key said he would not be standing Mr McCully down.
Mr McCully is overseas but released a statement saying the Government was comfortable with the process followed in relation to the Agrihub.
He said all relevant Government departments, including his ministry, would provide all necessary support to the inquiry.