His role was to stand back, he said.
"The appropriate thing to do here is to enable the police on one hand and the protocol people on the other to take it through the system — and that is what always happens in these cases.
"I was confident that I would be told if anything significant happened on the case."
If ministers second-guessed all advise they received from their officials, it would add heavily to their workload, Mr McCully said.
"I was entitled to believe what I was told in black and white and forwarded to the Prime Minister was correct.
"The first time there was any question about the advise that I got was when I saw the remarks by the Malaysian Foreign Minister and I thought: 'Hey, this doesn't sound like the briefing material I've been given, this doesn't sound like the position that New Zealand officials told me', and that's when I asked to see the files and that's when I asked to talk to him."
Mr McCully has not offered his resignation over the matter.
But he said there did need to be someone held to account and the ministry was investigating the matter.
"I intend to see that this matter is followed through, that those responsible are held to account."
Mr McCully would not be drawn on whether heads will roll within Mfat over the debacle.
In an interview with RadioLIVE this morning, he said the inquiry Mr Allen was undertaking within Mfat would establish whether any jobs were on the line over the handling of the incident.
"If I say that [heads will roll] that's going to no doubt prejudice the outcome ... this is a very, very serious matter ... I've made my views on that very clear. The chief executive has undertaken to me that he will conduct the appropriate inquiries and hold people to account, and that's as far as I can take it," he said.
"We need to make sure we don't have a repeat of what's occurred in recent weeks."
Former Labour Party Foreign Affairs Minister Phil Goff told Radio New Zealand Mr McCully had to explain why there was such an "extraordinary indifference or incompetence" by him and the Ministry in dealing with the matter.
"Speaking as a former foreign minister I know for a fact in an extraordinary situation like this, the minister would be right on top of the issue.
"He would be having daily negotiations and discussions through his chief executive officer in the ministry — the matter would never have been able to drift as this has been allowed to drift."
It seemed Mr McCully was more interested in sweeping the issue under the carpet than taking the matter up and seeing justice done for the alleged offence, Mr Goff said.
The Malaysian Government would be embarrassed that one of their nationals had allegedly behaved illegally, he said.
"And according to the Minister of Foreign Affairs in Malaysia, in his comments yesterday, this was always on the table, this was always on offer, it's simply that the New Zealand Government hadn't chosen to take that up."
Prime Minister John Key and Mr McCully had damaged the relationship with Malaysia by initially accusing them of not offering to waive Ismail's diplomatic immunity, Mr Goff said.
Diplomat to be extradited
Watch: Malaysia will extradite suspect
The Malaysian diplomat at the centre of the sex-case scandal will return to New Zealand to face charges for sexual assault, the Malaysian Government confirmed late last night.
In a dramatic twist to the case, Malaysian Foreign Minister Anifah Aman confirmed that warrant officer Muhammed Rizalman Bin Ismail would be sent back to this country, where there is an active warrant for his arrest. He would be accompanied by a military escort.
Mr McCully said Mr Anifah confirmed the decision in a phone call last night. "I want to convey my thanks to the Malaysian Government for this very welcome development which underlines the good faith and integrity with which they have approached this issue.
"There was never any intention by either government to let this matter rest, and regardless of whether the process took place in Malaysia or New Zealand there was a strong commitment to seeing justice done.
"The young woman involved has been through a great deal and the way this matter has been handled has only added to her suffering. I hope she, and her family, will welcome news that the accused will return to New Zealand so the matter can be fully investigated as was always the Government's intention."
A statement released by the Malaysian Government said: "It is of the view that this decision will provide an opportunity for Mr Muhammed Rizalman to co-operate fully and assist the New Zealand authorities in the ongoing investigations on the allegations made against him.
"In this regard, the legal principle that one is considered innocent until proven guilty should apply to Mr Muhammed Rizalman."
The Malaysian Government would provide legal assistance if necessary.
Complainant: I was forgotten
Watch: Sex case: McCully says sorry to Key
The warrant officer and former staff member at the Malaysian High Commission has been charged with burglary and intent to rape, which are punishable by up to 10 years' jail.
He was arrested on May 9, accused of following a 21-year-old Wellington woman home and assaulting her.
He was charged and appeared the following day in Wellington District Court. Ismail claimed diplomatic immunity and returned to Malaysia on May 22.
The New Zealand Government has maintained that it always wanted Ismail to remain in the country and face the charges.
But miscommunication between New Zealand and Malaysian officials led to Malaysia believing that repatriating Rizalman and trying him under a military court was acceptable to New Zealand.
Meanwhile, the complainant said she was "angry" she had been forgotten in a high-level international row.
The 21-year-old, who cannot be named for legal reasons, talked to Green MP Jan Logie because she had spoken in Parliament about sexual violence.
She told the MP police had warned she may have to give evidence in Malaysia if Rizalman was not extradited.
Ms Logie said the young woman had been watching parliamentary debates on television and was appalled by the focus of discussion about the case.
"Right at the moment she's running on adrenaline and is angry. She's been listening to all of these debates where she's been reduced down to the phrase 'the victim'. What she sees is the real issue - the fact that the system didn't listen to her, and has effectively been setting up to deny her justice. She gets the connection to that and a lot of other people's experience and she's angry."
Ministry of Foreign Affairs and Trade (Mfat) chief executive John Allen apologised to the woman yesterday "for the turmoil that she has had to suffer".
When he returned to Malaysia, Rizalman was in a military hospital in Kuala Lumpur for psychiatric observation to assess his mental and emotional condition.
