An investigation by ONE News has discovered the Government agreed to "delete" a proposed rule around animal safeguards when a Saudi businessman asked.
The story comes after ONE News previously revealed taxpayers gave the same Saudi businessman $6 million worth of farm equipment for his sheep breeding operation.
Foreign Minister Murray McCully wrote an undated letter to Hamood Al Ali Al Khalaf, which ONE News understands was written in March 2012, detailing just how far New Zealand would go to help him. Mr Khalaf lost hundreds of millions of dollars when New Zealand banned the export of live sheep to Saudi Arabia nearly a decade ago.
Mr McCully said the export of sheep for breeding, not slaughter, could be allowed "relatively easily" providing some rules were put in place.
But Mr Khalaf didn't like all of them.
Mr McCully wrote to Mr Khalaf: "You expressed strong objection to provisions that extend past disembarkation." In other words, any rules around what happens to sheep once they land in Saudi Arabia.
Mr Khalaf responded saying local rules were strong enough.
Mr McCully caved, saying: "I agree to recommend deleting provisions past the point of disembarkation."
Asked today if New Zealand has anything to say about what happens to sheep once they get to Saudi Arabia, Prime Minister John Key told ONE News "they are there as breeding stock".
Mr Key also said he has confidence in the way Mr McCully dealt with the situation.
ONE News investigated the final rules - there are none around what happens to sheep once they arrive in Saudi Arabia.
"If he's just buckled under pressure from wealthy Saudi Arabians then he's gotta front up and tell New Zealanders that," Labour leader Andrew Little said.
In the letter, Mr McCully goes on to pledge New Zealand's support for a farming venture in Saudi Arabia.