Mr Key said he couldn't recall particular occasions when he'd met Mr Fletcher subsequent to their school days.
"I'm sure I may well have done so. What I can say, if the member wants to know, is my mother was best friends with Ian Fletcher's mother. If that makes a conspiracy, fair enough."
Mr Key later told reporters he knew Mr Fletcher only "vaguely" before his appointment to the GCSB job.
He said he advised Mr Rennie of his relationship with Mr Fletcher at the time and told him Mr Fletcher was a good appointment.
"He was very bright. He used to work for Tony Blair and various other governments. He was one of the most senior civil servants in the British system. He's a very good person. He's doing a great job."
Asked if Mr Fletcher was a friend he said: "I wouldn't go that far. I haven't seen the guy in a long time."
But Mr Browning said he had been told by a friend who also knew Mr Fletcher that he and Mr Key continued to stay in touch after their school days.
"He (Mr Fletcher) would say to my acquaintance that any time he was in New Zealand he would always have a meal with John Key."
Mr Browning understood Mr Key, Mr Fletcher and Mr Fletcher's brother "were all mates"from their time at Burnside High School in Christchurch.
"They all went to each other's places together, they all hung out together."
While the relationship between Mr Key's family and the Fletchers was healthy, "I don't think it's healthy for him (Mr Fletcher) to be in that position."
Mr Browning said it was inappropriate given Mr Key had sole responsibility for oversight of the GCSB.
"That is real close and I think it's sinister ... it's something you might think of third world country where there aren't checks and balances.
"To have that sort of relationship I find very, very disturbing, it's just not correct".
Mr Robertson said Mr Key had failed to detail how extensive his relationship with Mr Fletcher was.
"Nor did he give any information about how he manages the balance between their personal and professional relationship."
"It is important that there is a high level of transparency around this issue because it relates to our national security and the fact that John Key is responsible for overseeing the very agency Ian Fletcher heads.'
Mr Robertson said Mr Fletcher was present at a February 16 meeting last year "where questions were raised about the legality of the agency's surveillance of Kim Dotcom".
"Yet John Key claims he was never told about the concerns until September despite receiving a number of briefings from Ian Fletcher on intelligence matters before then.
"It is vital that New Zealanders are reassured that there were no private conversations between the two men about this issue given John Key's revelation today that their families have a close personal connection."
Former New Zealand diplomat Mr Fletcher took over as director of the GCSB early last year, quitting a top level job with the Queensland Government.
His career includes stints with the British civil service, the European Commission and the UN.
