UPDATED: 7.14PM A huge leak of documents from a secretive Panama law firm has revealed New Zealand is being used as a tax haven by foreign politicians.

The leak of 11.5 million documents to journalists from Panama-based Mossack Fonseca is considered to be the largest in history.

LISTEN ABOVE: Tax specialist Professor Craig Elliffe from the University of Auckland talks to Larry Williams

SEE ALSO: Leak reveals how the global elite hide their billions

Malta energy minister Konrad Mizzi and the Prime Minister's chief of staff Keith Schembri set up two offshore trusts in New Zealand in 2015 through the firm.

There are reportedly thousands of foreign trusts registered in New Zealand, which do not pay local tax on offshore earnings, with their beneficiaries not registered with any public body.

Opposition parties have been on attack today but the Prime Minister said New Zealand has had the same tax laws for trusts since 1988, and was given a clean bill of health by the OECD in 2013.

"We also have extensive disclosure regime in New Zealand. We're signatory to a network of different treaties and we've been strengthening those laws over time.

"And actually the sorts of things where people are a tax haven are where they don't have those disclosure regimes, and where they are not party to those treaties".

Labour's Finance spokesman Grant Robertson said the New Zealand Government has been warned repeatedly over the years that there are loopholes in our trust laws.

"It doesn't seem that they've reacted with any great urgency over this, and now New Zealand's name has been besmirched on the world stage. I think it's time for them to step up," he said.

"We have to make sure that if somebody sets up a trust in New Zealand, using New Zealand's name effectively, that they are open to scrutiny.

"At the moment, if you're not generating income in New Zealand, you're not open to that scrutiny, and that's the loophole people are exploiting."

Green Party finance spokeswoman Julie Anne Genter said it wouldn't be too hard to fix, if we beefed up the rules and transparency for foreign trusts.

"The IRD warned the Government in 2013 that this was going to be very high risk but National has refused to take on any sort of reform".

Genter said because of the secrecy of a trust, sometimes they'll attract the profits of crime.

"People who are engaged in unethical or criminal activity and tax avoidance or evasion".

But Revenue Minister Michael Woodhouse said it's ridiculous to suggest that the country is a tax haven, because they thrive on secrecy.

LISTEN: Revenue Minster Michael Woodhouse talks to Larry Williams

He said New Zealand's rules require foreign trusts to be registered and there's also a strong tax treaty network with the express purpose of discovering and preventing avoidance.

Mr Woodhouse said the OECD has looked at our foreign trust rules in the past, and has no problem with them.