The Prime Minister has not apologised for linking international charities to the Panama Papers, saying it proves his point about scepticism over foreign trusts.
Apologies are being demanded of Mr Key after his assertion in the House yesterday where he used Parliamentary privilege to claim Amnesty International, Greenpeace and the Red Cross had been implicated in the massive leak of documents relating to foreign trusts used to hide money and avoid tax.
He also implicated Green MP Mojo Mathers based on her entry in the MPs Record of Pecuniary Interests.
However, just because someone's name turns up in the database does not mean they are breaking the law.
Millions of documents from the company were taken and given to the International Consortium of Investigative Journalists which trawled through the information.
Greens co-leader James Shaw says the charities had been a victim of an earlier scam where their details were used as a front to hide money in foreign trusts and were not named in the papers.
Meanwhile, Ms Mathers is one of several beneficiaries in a family trust in the UK which owns her grandmother's home.
Mr Shaw has accused Mr Key of trying to deflect the attention off what the Government is doing about the foreign trust industry.
"It's a new low for the Prime Minister to use Parliament to defame hard working charities and innocent backbench MPs in order to take the heat off himself," he said.
"If he's going to use Parliament to slander these people, he should use Parliament to apologise to them today."
Red Cross Secretary General Tony Paine says Mr Key was wrong in his assertion.
"We're going to keep out of the politics on this instance. One of the things Red Cross prides itself on is being neutral and impartial and simply say to people there is no genuine connection between the Red Cross and these events."
Greenpeace New Zealand executive director Russel Norman also says Mr Key was flat-out wrong and misleading.
"Just withdraw it and apologise to the charities. Red Cross, Amnesty International and Greenpeace -- we're not engaging in tax avoidance using foreign trusts in the Panama Papers, in fact we're engaged in good work and he should support us instead of undermining us."
But questioned on the issue in the House today, Mr Key said naming the three charities proves his point.
"What I said yesterday was factually correct. A very quick search of Greenpeace International shows you it is a beneficiary of the Exodus Trust.
"What it goes to prove is that all of the names of innocent New Zealanders that are being dragged across TV sets and sullied by member of this House, all because they unwittingly end up on this database should be taken with a grain of salt by New Zealanders."
Ms Mathers' links to a trust has been noted in the Register of Pecuniary Interests.
The Government has appointed tax expert John Shewan to look into the country's disclosure rules around foreign trusts, but the Opposition has called for the inquiry to be widened.
*An earlier version of this story said Mojo Mathers was found in the Panama Papers database which is incorrect. Neither her or the trust she is a beneficiary of are mentioned.