New Zealand Prime Minister John Key has settled a defamation case brought by a journalist after acknowledging comments he made about the man caused him professional and personal harm.

Key said Monday he now accepts that freelance cameraman Bradley Ambrose didn't deliberately record a private conversation Key had with political ally John Banks days before 2011 national elections.

Key said the amount of the settlement was confidential.

The prime minister had invited media to a staged event with Banks before asking journalists to leave so the men could talk in private.

Ambrose said he inadvertently recorded the men after leaving a microphone on. At the time, Key said Ambrose acted deliberately and questioned his ethics. Key said he now accepts that Ambrose did not do that or otherwise behave improperly.