Key has been under pressure since NSA whistleblower Edward Snowden on Monday revealed that the NSA had unfettered access to all New Zealand electronic communications, aided by the country's Government Communications Security Bureau (GCSB), Xinhua reported.
In an interview with Radio New Zealand, Key refused again to discuss the NSA's XKeyscore mass surveillance tool, which Snowden had said was being used to gather New Zealand electronic communications.
While New Zealand would contribute to databases, it had no control over intelligence-gathering of its partners in the Five Eyes network: the US, Britain, Canada and Australia.
"We do not control what other agencies and other people collect. There might be a variety of reasons for that," Key said.
Key added that Snowden had incorrectly claimed New Zealand agencies were contributing metadata, as they do not have the capability for mass surveillance.
New Zealand's inspector-general of intelligence and security, Cheryl Gwyn Tuesday issued a statement saying she was conducting an ongoing review of whether the GCSB complied with the restrictions on interception of New Zealanders' communications.
"I can advise that I have not identified any indiscriminate interception of New Zealanders' data in my work to date. I will continue to monitor these issues," Gwyn said.
US investigative journalist Glenn Greenwald also claimed that even if the GCSB "were just opening the door" for the NSA, it still meant the government was working on a system of mass surveillance.
"Not only are they collaborators in the collection of data, they then have access to that data through the XKeyscore system," Greenwald told Radio New Zealand Wednesday.
Greenwald said Gwyn should also be aware of the global pattern of intelligence organisations to keep the people in charge of them in the dark about their true role.