"The Government did give $43 million of assistance to the company, and when the company then returns and says `for the first time ever, we're going to give the prime minister, on the edge of election campaign, a hour with full editorial control', that's the suspicion that's left,'' Mr Goff said.
"If that was the reason for them doing it, that would be totally against the democratic process in this country.''
MediaWorks Radio general manager Jana Rangooni today dismissed the allegation.
"Some suggestion has been made that the agreement between Radio Live's owners and the Government regarding the staged payment for radio spectrum licensing played a part in our invitation to John Key to host The PM's Hour. This is not true.'' she said.
Ms Rangooni said the station had taken advice to ensure that programme was neither election programming nor election advertising, and that it had retained editorial control of the programme.
"We fully understand our responsibilities as a broadcaster and the rules around election advertising and programmes - our advice is that The PM's Hour is neither, but we understand that a complaint has been made about the programme so we will not comment further on this aspect.''
Ms Rangooni said Mr Goff was regular guest on the station.
"Firstly, while The Prime Minister's Hour show was not available to Phil Goff this year (for obvious reasons) we have been talking to his office about getting him into Radio Live again,'' she said in a statement.
"As of last week, we were standing by for his office to let us know which dates suit his schedule.''
Meanwhile, questions have also been raised about how Mr Key divides his time between different radio stations.
While Mr Key does regular spots on commercial stations Newstalk ZB and Radio Sport, public broadcaster Radio New Zealand said it had had difficulty getting the Prime Minister to appear.
The station said it made regular bids to interview Mr Key on its Morning Report and Checkpoint programmes but most were declined.
Of the 184 Morning Report programmes this year, Mr Key had agreed to be interviewed in 10.
Mr Key had been interviewed on Checkpoint five times this year, with his last interview on the show in June.