UPDATED 8.23pm The Government is denying a report New Zealand SAS troops have been sent to Northern Iraq.

The Guardian has reported British, Australian, and New Zealand SAS soldiers are all in the area, calling in air strikes to support local troops.

Defence Minister Gerry Brownlee said it's not true that our SAS is calling in air strikes, or getting involved in any other combat operations.

He said the Prime Minister has previously ruled out any combat role in Iraq, and they stand by that.

But Professor for Strategic Studies at Victoria University Robert Ayson said that doesn't mean the SAS isn't there.

"The Government hasn't ruled out the possibility that there are special forces there so I think there's a grey area there. On previous occasions the Prime Minister has talked about an intelligence role that New Zealand wants to find out what's going on."

Labour's associate defence spokesperson David Shearer says that would go against every promise the Government has made, to keep our troops out of combat roles.

He said directing air strikes wouldn't be a decision the Government would make lightly.

"It often will mean that forces are parachuted in behind enemy lines. They are there to direct air strikes onto targets. It's a high level combat role."

Mr Brownlee said our special forces can be deployed for short periods, but only to provide advise on issues like force protection, or to help with high profile visits.

New Zealand has around 140 troops at Taji Military base near Baghdad, where they are training Iraqi forces and federal police behind the wire.

The two-year deployment was extended for another 18 months in June.

A small number of New Zealand troops are also stationed at Besmeya military base, 52km from Taji.

In February, the United States asked all countries including New Zealand to consider sending special forces to assist the fight against the Islamic State (ISIS).

Key declined the US request, which came from Secretary of Defence Ash Carter.

“We don’t see that fitting with what we are doing,” Key told reporters at the time.

He said the Iraqi Prime Minister Haider Al-Abadi had made it clear that his government did not New Zealand to deploy SAS troops.

“They want their troops trained and they actually want to fight their own battles."

SAS troops were previously used during New Zealand’s deployment to Afghanistan, where they fought alongside local police forces. 

Additional reporting by Isaac Davidson of the NZ Herald