Mr Key has repeatedly claimed he did not know about the raid on Dotcom until the day before Dotcom's arrest in January 2012.
"I think [Dotcom] had seen my public comments that there was no way the Prime Minister of this country, the head of the SIS and GCSB, could not know. There is no way anywhere in the western world where that is even remotely possible.''
He said Dotcom had first contacted him through an intermediary after Mr Peters put out a press statement objecting to immigration rules applying in Dotcom's case.
"I went out and found out what his side of the story was. And funnily enough, things are not what they seem on that point.''
Pushed further he said "there's a lot more to come out.''
However, he stopped short of saying he was now on Dotcom's side in the matter. He was not now lobbying for Dotcom. "Most certainly I have not, and will not be, but if someone wants to put their side of the story that says I'm wrong, I'm happy to hear them out.''
Asked why he had dismissed Mr Key's claims about the three visits as "a crock of crap'' yesterday, he said the allegation was that he had visited Dotcom three times in one year. It was over two years.
***
John Key answers questions about the visits today:
***
Mr Peters said Mr Key must now reveal his 'informant' and was concerned he was being spied on. "This is a surveillance matter and I want to know more about it.''
He said he had not visited Dotcom because he was concerned about his political plans. "Unlike every other party, we are content to rely upon our own devices, our own resources.''
Green Party co-leader Russel Norman had visited to try to talk Dotcom out of standing in the election in case it resulted in a wasted vote that would favour Mr Key.
Mr Dotcom tweeted this morning, after Mr Peters repeatedly refused to confirm or deny yesterday that he had visited Mr Dotcom, saying it was a private matter.
That followed the claims by Mr Key that Peters had visited three times.
Mr Dotcom tweeted "Winston Peters didn't answer questions about his visit because we agreed on confidence. I released him from this confidence now."
Winston Peters didn't answer questions about his visit because we agreed on confidence. I released him from this confidence now. #manOFhonor
He followed that up by saying Mr Key should be asked how he knew about three visits.
"Only 4 people knew about it & probably Ian Fletcher at the GCSB."
Following this, Mr Peters released a statement after refusing to answer questions about the visits for the past fortnight, saying it was a private issue.
He said today that the pair met first to discuss Mr Dotcom's immigration issues, something the party had criticised the processes over. Mr Peters said Dotcom had approached him to explain his side of the story. He said the subsequent two meetings were to discuss the GCSB case of unlawful spying on Dotcom.
He said nothing was asked for, nothing was offered and no taxpayer funds were used.
Mr Peters said he had not revealed the visits before because they were confidential and he had agreed to keep them so.
"Mr Dotcom has agreed to lift the confidentiality agreement as it is a matter of deep concern that my movements were apparently being tracked.''
He said the Prime Minister had to come clean about how he found out.
"Does this mean some New Zealand politicians are now under surveillance? New Zealanders should be outraged that a former Deputy Prime Minister, Foreign Minister and Opposition party leader has apparently been spied on.''
Mr Key has refused to say how he knew about NZ First leader Mr Peters' visits to Dotcom, but says it did not come from the police, a spy agency or any other official agency.
Mr Key said his knowledge of the visits was not the result of information from police or a spy agency.
"I can categorically tell you it's got nothing to do with an official agency. From time to time people see things, and from time to time they tell me.''
In tweets today, Dotcom said only four people knew of the visits.
"None of the people who have "seen'' Winston Peters visiting the mansion have "told'' John Key about it. Come clean Mr. Key. Who told ya? GCSB?'', he tweeted.
Mr Peters was first asked about it on Waitangi Day and told The Diary's Rachel Glucina that rumours he had been there three times were "false'' but he refused to specify if he'd been there at all.
Mr Key said he did not know why Mr Peters had visited, or what was discussed. "I just think the public are entitled to know.''
He said questions were also needed about Green co-leader Russel Norman's visits.
"If Dr Norman is saying he would ride over a judicial process, you'd have to ask why someone would do that.''
Below: Audio - Peters avoids Dotcom answer
