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Mr Key said he didn't suggest Mr Ede should leave his role with the National party.
Mr Ede was tagged in Hager's book as Slater's primary Beehive contact and was described as National's "black ops" man.
During the period the book covered, Ede worked from the Prime Minister's Department, liaised with Slater and other right-wing bloggers, allegedly feeding them gossip, research and tips.
A former journalist for Taranaki Daily News and TVNZ, by 2003 Mr Ede was a senior press secretary in the National Party leader's office working alongside David Farrar, who later set up the right-wing Kiwiblog.
Mr Ede this year moved from the Prime Minister's office to work for the National Party on its election campaign but still retained his staff access card to Parliament.
He went to ground in the wake of the Dirty Politics allegations and has not responded to the claims in Dirty Politics.
Slater had described Mr Ede as "squeamish" and "gutless" for not fronting up to the media and talking about their relationship.
He said his contact with Mr Ede was normal politics, including the receipt of press releases.
"You are all claiming there is this vast conspiracy - it simply doesn't exist. That Jason Ede is some sort of ringmaster? In my view, Jason Ede is squeamish, and gutless.
"And the fact he has gone to ground and hiding and not speaking to anybody suggests that's true.
"My advice is front-foot everything. My advice is speak and tell your story. If you don't tell your story, everyone else is telling your story with their narrative."
Documents released last month by the hacker Rawshark showed emails between Slater and an email account Hager linked to Mr Ede.
The emails include one sent in 2008 - some months before Mr Key became Prime Minister - from his press secretary Kevin Taylor to Slater which Hager claims marked the beginning of a political dirty tricks campaign run by Slater with the help of Mr Ede.
Mr Taylor tells Slater: "Our intention is not to engage with any blogs".
However he goes on to state "Jason Ede asked me to mention he will be giving you a call in the next few days".