It ended today. Mr Key now says it wasn't deliberate while Ambrose concedes the Prime Minister was sincere in his belief at the time.
This, for the first time, is what really happened.
Herald on Sunday editorial managers gathered at 4pm on November 11, 2011 - 11-11-11 - for the usual Friday news planning conference. Then HoS editor Bryce Johns opened by announcing the existence of the recording.
It was startling news. Mr Banks and Mr Key had met earlier that day - a very public private conversation which took place in front of the nation's media right at the height of 2011 election fever.
Johns said the recording had been made by photographer Bradley Ambrose, a freelancer who had worked regular Saturday shifts for the Herald on Sunday for years. Deputy editor Jonathan Milne, who had been at that Newmarket meeting with Ambrose and other media, had learned of its existence when he chatted to the photographer afterwards.
Nobody had any idea what was on the recording but, whatever it was, it would be a focus for the next day's coverage. Nobody had listened to it but, whatever it was, we were in the midst of an election and it was likely there would be a high level of public interest.
Picture editor Chris Marriner rang Ambrose, who came in to drop off the recording. "I want nothing to do with it," Marriner recalls Ambrose telling him. As he would tell me later, he never meant to record the conversation.
That was the point I became involved. I was chief reporter at the time and generally responsible for coverage from Friday afternoon through to early Sunday morning. On this occasion it was decided I would handle the story, whatever it might be.
A plausible explanation
I had known Ambrose for years and worked with him on a number of stories. We sat down to chat about 6pm and the first thing I wanted to know was how the recording had been made.
I've always thought Ambrose's explanation to be completely plausible. I wasn't at the "Cup of Tea" at a cafe in Newmarket, but have spoken to many who were.
It was a staged meeting which was equal parts media and political circus. The meeting was the Prime Minister's signal to his National Party supporters in the electorate that they were free to vote for Mr Banks as the local MP.
If enough people did so - and they did - it would secure a coalition partner for the National Party and assist in forming a government.
The politicians wandered the cafe schmoozing the crowd, tailed by camera operators, journalists and photographers. They found a table by the window and spent a while answering media questions.
The crowd of media around the two men inside the cafe is what our industry calls a "scrum". If you don't have pole position for footage or images, it's elbows and shoulder-barging until you do. If you're the one with pole position, prepare for some bruises.
Ambrose told me how, in all the pushing and shoving, he had wormed an arm through to slide the black bag onto the table. He then went back to shooting footage. While his camera recorded audio itself, the quality wasn't as good as that captured by the remote unit.
And the bag? Seen those microphones with the fat foam ends? The purpose was the same - reduce distortion and get better sound. It helps with context to understand how novel it was for newspaper photographers to be shooting video at the time. Ambrose was one of the first making the move to video, and it's not unkind to say that in 2011 he was still building fluency with all the various new bits of kit he had to deal with.
After talking to media for a while, one of Mr Key's media stage managers called it quits. You can hear one of Mr Key's minders saying "that's enough" - and they moved as a rolling maul on to the Newmarket street. Ambrose told me that day he tried to get the bag back but Diplomatic Protection Squad staff pushed him and others out. Now on the other side of the glass, media peered at the two politicians on the other side of the window.
It's bizarre, looking at the footage and photographs now, that no one noticed Ambrose's little black bag with its recording device inside on the table next to the politicians.
Shut away from the action, Ambrose and others filmed the pantomime on the other side of the glass. There, right next to Banks and Key, was Ambrose's black bag. As he would discover later, it did what it was meant to do and beamed audio of the politicians' conversation back to the main camera body.
Prime Minister's office suspicious
Ambrose tried to get it his black bag back afterwards, without success. It was an exchange which likely added to the suspicion in the Prime Minister's office that the bugging was deliberate. Ambrose, who was there for the Herald Online, said he was a freelancer covering the event for the Herald.
In contrast, Herald staff told the PM's office it had no freelancers covering the event. Ambrose was right, but these were days when the various parts of our news organisation were not as integrated as they are now. Herald staff had no idea he was shooting video for the desk across the newsroom.
I got the audio file from Ambrose on a USB stick, plugged it into my PC and put headphones on. There was a problem.
Nobody had actually listened to the recording because nobody could listen to the recording. It was inaudible. Mr Banks and Mr Key had spoken in hushed tones and they had moved away slightly from where they were during the media part of the circus, and so away from the black bag.
I took the recording home, downloaded a program called "Audacity" and spent almost four hours trying to clean up the audio and create a transcript. Having done so, we knew at least what we were working with.
We went into Saturday still seeking clarity about how to proceed.
We sought legal advice and Johns, who had taken advice up the editorial chain, also considered the ethical factors.
I lobbied for seeking the permission of Mr Banks or Mr Key, and that was the direction we headed. If we had permission from either of the two politicians at the meeting, then the transcript would run.
The Weekend Herald that day had reported on the existence of the "mystery black bag". In a piece by political reporter Isaac Davison, which described the event as "the most eagerly awaited conversation of the election", Mr Banks said he wasn't bothered about any recording because he and Mr Key discussed "pretty bland stuff".
Bland, maybe, but Mr Banks wasn't going to agree when I spoke to him. "I'm not saying yes. I'm not saying no. I think you need to talk to the Prime Minister. It was his cup of tea, he paid for it."
The Prime Minister's office was rather more terse.
I spoke with Kevin Taylor, who was the Prime Minister's chief press secretary at the time. Taylor said "no" - he actually used capital letters in the email he sent. "The conversation was recorded in a manner where neither party knew it was being taped," wrote Taylor.
We went ahead with a story about the existence of the recording - that it contained references to Act's leadership, National's polling expectations and NZ First's electoral chances. That was "bland" in comparison to the way it was actually discussed.
Ambrose, meanwhile, was concerned at the loss of his remote recording gadget. It was worth $900 and an expensive bit of kit for a photographer. It was all-the-more expensive because Ambrose never sought - or received - any money from the Herald on Sunday for the audio.
The attempt to get it back may have also ramped up suspicion in National Party HQ. I asked for the equipment belonging to "our staff member" to be returned - Ambrose was a regular and long-term part of the newspaper's "family", for all he was freelance.
A "News of the World-type covert operation"
National's campaign manager Steven Joyce pointed out that Ambrose was a freelancer and raised the inconsistency as one of a number of elements which showed the Herald on Sunday had carried out a "deliberate News of the World-type covert operation".
Mr Key went down the same path, expressing concern over "the tactics that I believe have been deliberately deployed by the Herald on Sunday".
I spoke to Ambrose on Sunday as the howling hit fever-pitch and again on Monday morning. He wasn't enjoying being at the centre of the debate, having been identified by then as the camera operator who made the recording. There was online and talkback anger. One blogger posted Ambrose's phone number and other personal details online.
There was also disbelief at the claims it was a "News of the World-style" operation. I - and others involved in the story - were astonished at the claim, disbelieving and simply speechless at having actions and motives ascribed which bore no resemblance to what happened.
Ambrose, though, was deeply upset. He became the focus of the attention that followed after Mr Key made a police complaint. The issue didn't go away, either, after he gave a copy to TV3 and it started reporting on the content of the conversation, albeit via claims being made by NZ First leader Winston Peters.
I saw Ambrose struggle under the scrutiny. He had been likened to those who tapped the phone calls of a murdered teenager - the action which saw News of the World shut down. He got less work in some places and in others he could never be sure whether people saw him as "the man who bugged the Prime Minister" or just the photographer he wanted to be.
It ate at him like acid. It was that corrosive. Where he had once provided us with a recording because we at the Herald on Sunday stuck together, he became someone uncomfortable in a newsroom.
He became more restrained. He went volcano-diving, filming inside craters. It was a great adventure but I always wondered if he pursued it because it took him away from an media environment in which he believed he was a pariah.
Ambrose, I believe, felt driven to take the defamation action which has ended today. Investigative journalist Jon Stephenson made the same decision, for many of the same reasons.
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• Defence Force settle defamation action with journalist
Stephenson's claim against the NZ Defence Force ended with a settlement, as did Ambrose's case against the Prime Minister. It includes a statement from the Prime Minister I have always believed to be true.
"Mr Key now accepts that Mr Ambrose did not deliberately record the conversation, or otherwise behave improperly," came the email from the Prime Minister's office.
It's a ending which clears the name of all those who worked on the story at the Herald on Sunday in 2011. That includes me, and I'm pleased about that.
But for Ambrose, who was a freelancer, it will mean more. Those who work for themselves in this industry are the most vulnerable.
I imagine Ambrose is feeling a great freedom and lightness of being. He was carrying a great weight, and now it is gone.
The tale of the teapot
November 11, 2011: Prime Minister John Key meets Act's John Banks at a Newmarket cafe for a symbolic cup of tea to induce National supporters to vote for the Act candidate. Their conversation is captured after freelance cameraman Bradley Ambrose leaves a recording device in a black bag on their table.
November 14: Mr Key lays a complaint with police after details of his conversation with Mr Banks are published in the Herald on Sunday.
November 23: Police search the offices of the Herald on Sunday and TVNZ as part of their investigation.
January 26, 2012: The recording is anonymously published online.
March 26: Police say that after a four-month investigation they chose not to press charges against Mr Ambrose.
May 5: Mr Ambrose reveals he and his lawyers are considering suing Mr Key for his comments about him.
December 9, 2014: Court documents reveal Mr Ambrose is suing Mr Key for $1.25 million.
Today: Mr Key and Mr Ambrose issue an agreed statement, which states Mr Key now accepts the recording was not deliberately made. The defamation proceeding has been settled.
