"The thought that you would leak a major report to try to soften up the public before making a formal decision is the stuff of banana republics," Mr Seymour said.
The Act leader, whose vote helps to prop up the Government, said the leak had undermined New Zealand's justice system.
"I think people ... should ask themselves: whatever you think of David Bain, if it was you, would you want to face such a process of justice by politics rather than due process?"
Asked directly if he thought the leak had come from inside the Government, Mr Seymour said: "Well, you'd think the NZ Government could keep something away from the Herald.
"The right thing to do is compensate him, at the very least for his legal costs."
Justice Minister Amy Adams said the leaking of the report would not change her approach to the matter.
Her comment followed concerns the long-running process may have to start again.
The confidential report found Mr Bain did not meet the threshold of "innocent beyond reasonable doubt".
The finding means he does not meet the "extraordinary circumstances" test for a compensation claim of wrongful imprisonment.
Mr Bain was convicted of murdering his parents and three siblings in June 1994 by shooting them with a .22 rifle. He served almost 13 years of his minimum 16-year life sentence. The Privy Council quashed his convictions in 2007 and ordered a retrial. He was acquitted after a three-month retrial in Christchurch in 2009.
If Mr Bain had been successful in his application for compensation, he could have received up to $2 million on estimates from other successful compensation claims.
