" My strong message is, I really think the ministry should sit down with the union and both sides should put their pistols away for a minute.
"Before the unions threaten significant industrial action I would really encourage the parties, both the ministry and the unions to sit down together and talk about what we're trying to achieve and how that might play out.
"Moderation is legitimately one of the issues that needs to be resolved when it comes to successfully ensuring that National Standards data is accurate."
Mr Key said data showed there wasn't a lot of resistance to National Standards any more.
"If you look at the year one data from last year, there were about 300 non-complying schools, this year it's only 13 - the resistance to National Standards is evaporating."
The ministry said the PaCT tool would make National Standards data more reliable.
The tool asks teachers to judge students' National Standards levels by working through tick-boxes of illustrations representative of achievement outcomes.
The PaCT tool then generates a result for each student.
New Zealand Principals' Federation president Phil Harding said schools are fearful about how the data will be used.
"It will be the new national test. We were promised by the ministry and the minister, who was Anne Tolley at the time, there wouldn't be a national test.
"This narrow tool will take over teacher judgements and do it for them."
NZEI president Judith Nowotarski said the tool would undermine teacher professionalism, reduce teaching quality for students and cement a reliance on data from National Standards.
"It also opens the floodgates for other initiatives like competitive performance pay for teachers. There is no research evidence to show that when teachers receive performance pay it helps students learn better."
A spokesman for the ministry said National Standards were not a national test.
"PaCT is an online, web-based tool which is being designed to help teachers make consistent judgments against the National Standards in reading, writing and mathematics. The tool will support teachers to make overall judgments about a student's achievement and track progress over time."
He said an advisory group had been set up to get teachers' input into its design.
"The feedback received has helped its design and development."
He said the tool included a framework for describing the steps that students typically take as they develop expertise in reading, writing and mathematics across the curriculum.
"Teachers' judgments are key to judging a student's progress and achievement and in PaCT the final decision is made by the teacher."