It has been revealed that former Prime Minister John Key approached the Forestry Minister on behalf of a US billionaire and two Northland iwi for their development to be exempted from a ban on foreign speculators buying houses.

Photo: Facebook: Air New Zealand

The exemption for the Te Arai development was included in the legislation, but was later struck out by the Speaker of the House.

National has been vigorously pursuing Cabinet Minister David Parker over the issue, but it now appears one of their own was involved.

Two iwi - Te Uri o Hau and Ngāti Manuhiri - have done deals with New Zealand developer John Darby and US billionaire Ric Kayne to build golf courses and luxury homes on coastal land bought with Treaty settlements.

In his submission on the legislation, Mr Kayne said the exclusive Tara Iti golf course now employed 50 people full time, 30 part time, and provided work for 100 contracted caddies.

Sir John has played golf at the course - including with Barack Obama when he visited this year.

In Parliament this afternoon, Forestry Minister Shane Jones told the House he had been lobbied by someone associated with the Te Arai Development.

Winston Peters asked who the concerned local citizen was who lobbied him.

Mr Jones replied that he went to a meeting at the Tara Iti golf course, which used to be Crown Forest Land.

"Present at that meeting were members from the Te Uri o Hau hapū, Mr John Darby and the US billionaire Mr Ric Kayne.

"I'm disappointed that the latter's name has been traduced by the opposition in the house, I had never heard of the man's name until I was encouraged to meet him by the former Prime Minister, Right Honourable John Key."

Shane Jones said he got the call from Sir John earlier this year and did not think there was anything improper about meeting with the group.

Mr Parker then popped up.

"So let me get this straight ... is the minister saying that after all of this spurious and defamatory accusations leveled at me and the government by the opposition, that the Right Honourable Sir John Key had been making representations on behalf of Te Arai for help before I even knew about it."

National's Gerry Brownlee objected to Mr Parker's question, arguing it was not a question at all - rather he was making an allegation.

"Well what this house concerns itself with is potential for corrupt practice and that is the essence of what is at stake here - this sort of question, this self-justifying sort of question, does not do anything to improve the integrity of the house."

After a number of arguments about wording - Mr Parker asked whether Sir John had been lobbying on behalf of Te Arai before he became aware of the issue.

Mr Jones replied that he conceded it to be part of his job.

"When a former Prime Minister - who I've got quite a bit of time for, rightly or wrongly - encouraged me to make contact with a fine investor - in my view - Mr Ric Kayne and associated parties, I had no qualms in doing that whatsoever."

Mr Brownlee asked whether Mr Jones whether he made representations to cabinet after the meeting.

"I made my concerns about compensatory treaty land known to Mr Parker - that is not the only block of Māori land that people have referred to me that is caught up with our universal and blanket ban."

Mr Jones said he was absolutely not trying to allege there was something improper in Sir John Key approaching him - he said it was quite the opposite in fact.