Labour MP Kelvin Davis said it beggars belief the Corrections Minister didn't know about alleged prison fight clubs earlier.

Corrections bosses and their minister were told weeks ago a prison inmate may have been murdered but nothing was passed on to police.

Private prison operators Serco have been summoned to an urgent meeting at the Beehive on Thursday as allegations mount of violence and standover tactics at Mr Eden prison.

Under fire Corrections Minister Sam Lotu-Iiga said he was becoming increasingly concerned at the number of stories emerging about events inside the Serco-run prison.

Serco bosses would be expected to come clean at that meeting about any other serious incidents "or they will face serious consequences", Lotu-Iiga said.

Labour MP Kelvin Davis has claimed a Mt Eden prisoner died after being thrown from a balcony in an initiation ceremony known as "dropping".

Using parliamentary privilege Davis claimed "Prisoner Evans", was transferred out of Mt Eden by Serco despite his injuries and questioned whether that was to avoid paying financial penalties.

The man, since named as Nick Evans, later died at Whangarei Hospital after guards at Ngawha prison had him admitted because of their concerns about his condition.

Davis claims Evans had a ruptured lung, consistent with being dropped from a height.

Lotu-Iiga insisted on Wednesday the claims were unproven but admitted he had heard "rumours and allegations" about the death.

But it has now emerged that Lotu-Iiga and Corrections bosses were grilled by Davis at a parliamentary select committee hearing weeks ago.

A transcript of proceedings show Lotu-Iiga was told by Davis: "There's this guy that passed away recently...apparently he had a ruptured lung. I've asked 'how do you get a ruptured lung? It's often from a high impact collision and there's accusations that prisoners have been thrown off balconies and then they're getting transferred out of Mt Eden correctional facility."

READ MORE:

* Murderer Nikki Roper claims his letter for help was ignored by prison staff

* Fight club filmed on phone despite multi-million dollar jammers

* Convicted murderer critically injured at Auckland prison

* Minister knew about prisoner who 'fell'

* Opinion: Corrections Minister Sam Lotu-Iiga thrown under a train by Corrections bosses

* Prisoner death claim by Labour MP Kelvin Davis over fight club allegation

Asked on Wednesday about that transcript, Lotu-Iiga appeared to have no recollection of the exchange. He stood by his earlier statement, meanwhile, that he had never heard the term "dropping" till it was raised this week.

In a statement issued later, Lotu-Iiga said the transcript snowed Davis "raised an accusation only of prisoners being thrown off balconies".

"I responded and it is on record that I was aware of the case of a prisoner transferred to Ngawha who had died. I said the death was being investigated and I did not want to speculate on the death. It is the subject of two inquiries, one by the coroner and one by the Corrections chief inspector."

But Davis' allegations were not referred to police.

Questioned over that failure, Lotu-Iiga said that was Corrections' call. But he indicated that they were awaiting the outcome of a coroner's inquiry as the cause of death was still unknown.

He would be asking his officials, however, why none of them made a note at the select committee to follow up the accusation.

The allegations surrounding Evans emerged in the wake of video showing "fight clubs" operating within Mt Eden prison.

There are also allegations of a riot that was hushed up - which Lotu-Iiga also denied on Wednesday.

But he confirmed there had been an "incident" which required the Corrections "advance response team" to enter Mt Eden and take control.

"They [the prisoners] were barricading themselves in with hoses....ultimately the prisoners gave up and it was dealt with."

He rejected suggestions Serco had failed to report it as a riot because that would have incurred financial penalties.

Prime Minister John Key backed Lotu-Iiga's handling of the various allegations.

"I am very confident. When it comes to the fight clubs, obviously there's a number of investigations taking place there. But I understand there's a report that was written sometime earlier, but that didn't even get to the chief executive, let alone the minister."

But in a sign of the pressure that the minster is under, he has summoned Serco bosses to his Beehive office on Thursday.

Key said Davis was making serious allegations about Prisoner Evans and he had a moral obligation to go to the police.

He had no concerns, meanwhile, about Serco running some prisons.

"It wouldn't be like it's the first time in the history of New Zealand prisons we've had fights or issues, those things do happen - they're a part of the process. "

On the practice of "dropping", Key said he would be concerned if it had been raised with minister earlier.

"Yes, I'd be concerned if that had really happened, my understanding is that's not a term people understand or know. But that is a situation where people become potentially potentially very seriously injured, if not fatally injured - it's a very serious matter."

Serco confirmed on Wednesday a cellphone has been found in a search of Mt Eden prison.

It initiated a full search of the prison on Monday. Managing director Scott McNairn told Radio NZ he couldn't say whether the cellphone that was found had internet capability but it would now be part of a wider inquiry into the fights.

The inquiry comes on the back of videos emerging on social media showing gang members engaging in organised fights at the prison.

The fights were filmed on contraband cellphones and posted on YouTube, sparking the minister's call for an an investigation.

Davis has accused the Government and Corrections of sitting on their hands over allegations surrounding Serco and said there had been talk about fight clubs dating back to 2012.

McNairn said Evans' death at Northland Region Corrections Facility was subject to a coroner's inquest and it would be inappropriate to speculate on his cause of death.

Serco did not determine which prisoners were transferred, or when, he said in response to Davis' allegation that Evans was transferred out of Mt Eden prison immediately following the alleged "dropping" incident.

Davis said he wanted a "real investigation, not a narrow review" of the allegations and for police to be involved in light of the seriousness of the alleged issues.

"There's real serious issues going on at Serco and if the minister doesn't want to believe it and he's only going to believe YouTube videos then we've got real problems."

Davis said it "beggared belief" that the minister didn't know about the alleged fight clubs earlier.