"As you all know, New Zealand has a long-standing policy of not repatriating those bodies. While successive governments have maintained this policy, there are clearly concerns that need further investigation," Key said today.
"I heard from some of you directly at the 50th commemoration of the Vietnam War recently. And we have listened."
At that commemoration of the Battle of Long Tan in August, Vietnam War veteran Robert Davies described the failure to repatriate soldiers from non-commonwealth war cemeteries in Malaysia and Vietnam as "a blight on the honour of this country".
Addressing Key directly, Davies said he was "bewildered" by successive governments' unwillingness to repatriate a small group of soldiers. It was breaking an unspoken social contract between governments and the soldiers they sent to war, he said.
The families of some soldiers buried overseas have expressed concerns about the conditions and access to war graves, in particular in Malaysia.
Some of the soldiers are buried at sites which are not official Commonwealth war graves.
Veterans' Affairs Minister Craig Foss has now asked the Veterans' Advisory Board to review New Zealand's policy on repatriation.
Australia recently changed its position to bring home dead soldiers buried in South East Asia.
Today, Key said the Government expected advice back from the board in March next year.
"The board will take into account the wishes of the next of kin, as well as New Zealand's cultural considerations such as tikanga Maori, and the culture of the countries in which the service personnel are buried."
New Governor-General Dame Patsy Reddy, who was officially sworn-in at the end of last month, also addressed the RSA national council. Key told the audience it was his first public appearance with her.
"And I think you will all agree with me - she is an excellent choice, and is fitting beautifully into the role."