Prime Minister John Key has admitted he shoulder-tapped family friend Ian Fletcher in January last year for the top job at the Government's spy agency, the GCSB.
The revelation comes after Mr Key played down the relationship last week, when he claimed State Services Commissioner Iain Rennie had recommended Mr Fletcher.
But Mr Key's office released a statement today saying the Prime Minister rang Mr Fletcher and recommended he apply for the position.
Mr Fletcher did apply, was the only candidate to be interviewed and was offered the job. This was after a shortlist of four others had been rejected earlier.
"The Prime Minister rang Mr Fletcher and said that if he was interested in the position, he would need to go through a process," the statement says.
"Mr Fletcher was appointed due to his strong background which spanned across a number of countries. He was the best candidate for the job."
In Parliament last week, Mr Key told reporters the only role he played in Mr Fletcher's appointment was that that Mr Rennie had come to him with a recommendation.
"The State Services Commissioner made the recommendation, they interviewed him, he hired him," he said.
Mr Key said when he heard Mr Fletcher had been appointed, he gave his approval.
"I said it was fine, a good appointment, he's very bright. He used to work for Tony Blair and various other Governments. He's been one of the senior civil servants in the British system," he said.
The Labour Party has accused Mr Key of "cronyism" and are calling for Mr Key to front up about the true nature of the relationship.
"He spent a lot of energy last week trying to diminish his friendship with Ian Fletcher - we can see why now, because clearly he did intervene in this process," says deputy leader Grant Robertson.
"I have to say it just reeks of cronyism," he says