"Both parties have got options available to them if they want to test the veracity of the statements that have been made or refute those. That's a matter for those guys," Mr Key said yesterday.
He confirmed he had been aware of Mr Liu's statement and what was in it since "a few weeks ago".
Asked whether Mr Liu should provide evidence of his donations, Mr Key said: "Yeah, absolutely he should go ahead and do that".
"I don't know the merits of who's right and who's wrong in that case. That's a matter for the two parties to resolve."
Liu told the Weekend Herald last week that he had given "equally to Governments of both colours".
National declared a $22,000 donation in 2012, but when asked about donations other than that from the Chinese property developer, party president Mr Goodfellow said he didn't want to discuss individual donations.
"I think it's more appropriate that you ask him what he meant by that statement, whether he gives to both parties or somehow meant a dollar amount. We disclose where it's required and that's exactly what we've done. Our practice is disclose according to the rules."
Labour Party president Moira Coatsworth said there were "very fair questions" for National to answer about Liu's donations. But she criticised the Herald on Sunday for not providing Labour with Liu's statement.
Meanwhile, the Electoral Commission yesterday said it would not investigate Liu's alleged donations unless a complaint was made.
A spokesman said the commission had so far received no complaint "and has been provided with no information in relation to the alleged donations".
"The commission is not making any inquiries at this point. If it receives information which substantiates the alleged donations it will consider looking into them."
If the commission received a copy of Liu's statement it would read it "and make a decision whether to look into it further".
The alleged payments were made before changes to the Electoral Finance Act which cracked down on anonymous donations.
For full coverage on the Donghua Liu case click here.