Oppostion MPs have used parliamentary privilege to link the exporting of swamp kauri in Northland to National Party donors and insiders.
Concerns have been raised in Northland that kauri logs are being exported illegally - with stumps being labelled as finished products and sent offshore.
Northland MP Winston Peters says that is a rort, but the Government rejects the claims.
In Parliament, Labour's MP for Te Tai Tokerau, Kelvin Davis, asked the Government if ministers were "aware of reports that local wood manufacturers have been refused the opportunity to buy swamp kauri from Kauri Ruakaka mill, which was formerly called Oravida, and is allegedly involved in exporting raw swamp kauri?"
One of the directors of Oravida is National MP Judith Collins' husband, David Wong-Tung.
Under further questioning in the House, Minister Nick Smith replied, "I thought the member (Kelvin Davis) was above getting involved in this kind of murk".
Winston Peters then asked Dr Smith,: "Is he denying what is well known in Northland because people who are high up in Oravida are major donors to the National Party?"
Dr Smith replied that the law had been changed under Labour in 2004.
He says there have been prosecutions under the Resource Management Act in the past and the Ministry for the Environment and Northland councils are confident the resource is being "responsibly managed".