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Key grilled over SkyCity deal

By Peter Wilson and Laura McQuillan

Prime Minister John Key has been grilled in parliament over the SkyCity convention centre deal and came out on top after a rowdy question time.

Speaker David Carter threatened to eject Green's co-leader Metiria Turei and Labour MPs claimed Mr Key was dodging questions as they picked over the deputy auditor-general's report on the tender process for the Auckland convention centre.

Mr Key rejected all their assertions that Phillipa Smith's report showed the government was doing "a sleazy deal" and said her finding that nothing inappropriate happened had cleared the way for the deal to be closed.

He earlier told reporters he hoped work would start on the centre next year and it was confirmed officials were about to resume negotiations.

"It was held up because Labour and the Greens made accusations about a cosy deal and that's been utterly rejected," Mr Key said.

"SkyCity has the right location and it was the only one prepared to put up the cash - all the others (bidders for the contract) wanted the government to pay for it."

The inquiry looked at the process the Ministry of Economic Development followed in 2010 when it chose SkyCity to build the $350 million centre, in exchange for a law change allowing up to 500 more pokie machines in its casino.

The report identified delays in advice from officials to the government about SkyCity's proposal, and poor planning and execution of the expressions of interest process.

Ministry office staff were still meeting with SkyCity to talk about its proposed plans and what regulatory changes it might want after expressions of interest opened, and SkyCity was given a better understanding of the government's thoughts - including that it did not want to contribute funding to the convention centre - than other interested parties were given.

However, Minister of Economic Development Steven Joyce says he does not accept that the process was flawed.

Mr Joyce says "reasonable people" may disagree with the auditor-general on some of her findings.

He is confident the ministry will incorporate her report into its procurement guidelines for the future.