UPDATED 4.12PM: The argument over whether New Zealand is a tax haven is getting personal, as the Government blasts some proposed solutions.

New Zealand's trust laws have come under new scrutiny this week after a massive leak of documents from a Panama-based law firm revealed that this country played a major role in allowing overseas investors to hide their tax secrets.

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The Prime Minister has defended his Government's record during Parliament's question time, saying the issues raised in the Panama papers aren't major, and also aren't easy to fix.

During the debate, John Key said they'll take any advice from the OECD, rather than the Green Party.

"But if the member really thinks we are going to adopt their member's bill that wants to actually name tax payers' IRD numbers for instance, the member's got to be barking mad if she thinks that should be in the public domain".

Labour Leader Andrew Little is attacking the way the Prime Minister's responded to the matter and "even now, he wants to sweep it under the carpet. He's got to do something now."

• The Soap Box: 'Panama Papers' a reminder of how lax our tax laws are

Little said that Key was warned in 2013 "that it was an issue, it was a problem, and he's done nothing."

"It's a problem confronting John Key, he's the Prime Minister, he's in charge of the government, it's his job to act and stop blaming everybody else."

"His only response is to side with the mega-rich tax dodgers rather than cleaning up with the law. His moral compass is completely broken".

But John Key's hitting back, saying the current rules were put in place by the Labour Party back in 2006.

"If the member's now telling us that Labour got it wrong, get on his feet and apologise".

Little also said that Key wanted New Zealand to be "a target and a shelter for the rich in Europe."

"Now we have this issue with foreign trusts, and billions of billions in foreign trusts here fleecing if not our tax system, then other tax systems."

However the Prime Minister has maintained the government will not change any tax rules until the IRD has looked at the issue. 

"New Zealand has had a couple of trusts registered here but it's not the only country," he said.

"In the context of eleven-and-a-half-million [documents leaked] and the web of things that will have gone on...New Zealand is involved and we need to look at that."

Key said it's for the IRD to look at it, and if changes are needed they'd be made - providing they don't undermine the tax base here.

He also denied that the revelation of New Zealand's tax haven status was not an embrassment for the government. 

New Zealand had a robust, legitimate tax regime which required foreigners to register their trusts, he said.

"Tax havens are where there's non-disclosure of information. New Zealand has full disclosure of information."

The Australian Financial Review reported that the law firm at the centre of the 'Panama Papers' leak, Mossack Fonseca, operates across 21 tax havens, including New Zealand and more well-known Caribbean havens.

The 11 million leaked documents show that Mossack Fonseca's services appear to have been used to facilitate illegal activity including money laundering. They also implicated New Zealand-based trusts in a political scandal in Malta.

Key said he knew nothing about the Maltese Government minister's trust in New Zealand. There were many legitimate reasons that a foreign investor might set up in New Zealand, he said, including its stable democracy and robust legal system.

The Maltese official's trust was one of 12,000 foreign trusts in New Zealand which do not pay tax on foreign income. They generate around $24 million in fees a year.

Inland Revenue warned in 2013 that New Zealand's foreign trusts posed a reputational risk.

Revenue Minister Michael Woodhouse ruled out any changes, saying New Zealand had "world-class" tax rules.

"The tax treatment of foreign trusts may come up in the OECD's Base Erosion and Profit Shifting work programme in which case we would look at our own rules in the context of everyone else's," he said.

Green Party finance spokeswoman Julie Anne Genter said New Zealand's trust laws were unsustainable, and that the foreign trust industry should no longer able to operate in secret.

"New Zealand is ... being described as the 'quiet little achiever' as a tax haven for criminals," she said.

She wanted the disclosure regime to be strengthened immediately to require more complete information including a settlor's identity, resident country, and financial reporting.

New Zealand First leader Winston Peters is demanding assurances from Key that senior ministers have been following the rules.

"Can he assure this house that none of his present or former ministers, that's him as Prime Minister, have been and are involved in tax haven activity".

Key can't speak for any other member, but has highlighted the obligations MPs have to register their pecuniary interests.