The Government is facing fresh accusations of putting New Zealand's agricultural reputation at risk with its controversial Saudi farm deal.

Photo: 123RF

The Government flew 900 pregnant sheep to the Saudi farm late last year as part of an $11 million deal with the farm's owner, Hamood al-Ali al-Khalaf, whose anger over the cancellation of live sheep exports was preventing a free trade deal with the Gulf states. It spent $1.5 million to fly the sheep to Saudi Arabia, gave Mr Al-Khalaf $4 million directly and spent a further $6 million kitting out his farm.

But the deaths of hundreds of New Zealand-bred lambs at Mr Al-Khalaf's farm in unexplained circumstances have reignited animal welfare oncerns.

Labour Party trade spokesperson David Parker said the Government was ruining New Zealand's reputation.

"One for fair dealing, paying facilitation payments in order to advance a free trade agreement," said Mr Paker. "Two they're sullying our reputation for animal welfare - 70 percent of the lambs dying on this so-called model New Zealand farm - and then the third part of our reputation that they're sullying is our reputation for agricultural excellence."

Primary Industries Minister Nathan Guy on Wednesday said he did not know there had been large-scale lamb deaths but later said he thought they had died in a sandstorm.

"Well there's a lot of sand and the wind can get up and that caused, as I understand it, some mortality, but I don't have all the information," Mr Guy said yesterday.

The sandstorm claim was contradicted by the company that exported the sheep, which said the lambs died from a range of illnesses during heavy rain.

Green Party co-leader James Shaw said the Government's Saudi sheep deal was a complete debacle.

"Nathan Guy is saying they died in a sandstorm, the company that shipped them overseas that they died in a rainstorm and the documentation that we've seen says that they died as a result of malnutrition, poor parenting and starvation - it seems like the Government has no idea what's going on," Mr Shaw said.

"It goes to show what a shonky deal this whole thing was in the first place."

The Government agency running the taxpayer funded demonstration farm is refusing to tell the public how the lambs died.

New Zealand Trade and Enterprise sent a vet to the farm and spokesperson Quentin Quin said he knew why the lambs had died.

"But I'm choosing to say that this is the information of the Al-Khalaf group, it is their property, their operation and it's for them to make comment on the performance," Mr Quin told Radio New Zealand.

Cabinet documents

Claims by Prime Minister John Key that Labour was looking to make a similar deal of its own with the Saudi businessman have fizzled after the release of Cabinet papers from 2007.

The Government claimed Mr Al-Khalaf had threatened to sue for about $30 million and that Labour had been considering a deal of its own in the face of the legal action.

When the Cabinet papers were eventually released this week, Mr Key hinted the details he had referred to had been redacted by officials.

Radio New Zealand has seen the uncensored Cabinet documents and there is no mention of threatened legal action by Al-Khalaf, as the Prime Minister has repeatedly claimed, and nothing about a deal.

The papers make clear the then Labour Government knew the Saudi agriculture minister was extremely unimpressed with the continuing ban on live sheep exports, and that it could affect the chances of a free trade deal with the Gulf States.

The papers say there is a low chance of a complaint to the World Trade Organisation.