The Government is now admitting the Saudi sheep deal was motivated by trade, rather than a potential lawsuit.

A Saudi businessman received an $11.5 million payment including stock and farm equipment, after he was annoyed by New Zealand stopping live sheep exports for slaughter.

National previously blamed a potential lawsuit for the need to act, but now Foreign Affairs Minister Murray McCully says that was never the biggest problem. He believes losing trade relationships was the biggest worry.

"The big problem was the risk to New Zealand's existing trade with Saudi Arabia, the risk to our existing trade with the Gulf countries."

Labour's trade spokesperson David Parker said it shows attempts to blame the previous Labour government were wrong.

"It was never true. It still isn't true. He still will not even answer the most basic questions."

Today in parliament a fiery debate broke out in the Foreign Affairs and Trade select committee, when National MP and chair Mark Mitchell ruled questions relating to the deal were irrelevant.

Green Party co-leader James Shaw said it looked like a pre-planned tactic.

"It was simply designed to give him the opportunity to talk about anything else other than the Saudi deal until we ran out of time."

Foreign Affairs Minister Murray McCully says he didn't give instructions to Mr Mitchell to block the questions.