Mr Key said it depended on the circumstances whether a karakia could be seen as religious or not.
Mr Key said it was a matter of personal choice.
"In certain circumstance they are very important - that's part of the cultural customs that we acknowledge and recognise.
"Obviously in one sense it's a prayer, on the other side of the coin if you went to any marae before you ate something a customary norm would be to offer a karakia."
But he said teachers shouldn't be forced to deliver a karakia.
Maori Party co-leader Pita Sharples issued a statement in response to the complaints from staff at Keltson Intermediate, saying he knew the school and community well.
"There are a lot of Maori and Pasifika whanau whose children attend Kelston Intermediate. The school's culture should reflect the community, and the whanau who send their children to the school.
"It is absolutely fitting that karakia be used in the school, as it is a vital part of our lifestyle and it is also consistent with the New Zealand Curriculum."
Dr Sharples said if individual teachers had an issue with leading students through karakia, then it should be worked through between the school and families.
"It is important for their success in education that our schools respect and reflect the culture of our kids to make them feel welcome and connected. Karakia is an integral part of kaupapa Maori education, and no doubt a contributor to our kids' achievements."
The New Zealand Educational Institute was asked to address concerns held by some staff at the school over reciting a Maori prayer before lessons start each day.
NZEI have confirmed the union will be meeting with the school over the concerns of the teachers.
Kelson Intermediate principal Phil Gordon said he originally had no idea staff were unhappy with the karakia and only found out when an NZEI representative contacted him.
A Ministry of Education spokesman said state primary schools were required to be secular but this didn't preclude teaching about religion.
"A 2009 document by the Human Rights Commission advised teachers and principals to avoid leading pupils in prayer," he said.
Dr Sharples said no-one was asking teachers to change their spiritual or religious beliefs, but classrooms had to be safe for all kids, and cultural safety is part of that.
