Henry resigned from Television New Zealand yesterday after he became the subject of several hundred complaints to the broadcaster over racist remarks he made about Governor-General Sir Anand Satyanand and his mocking of the name of Delhi Chief Minister Sheila Dikshit.
On last Monday's Breakfast show he asked Mr Key whether Sir Anand, whose five-year term ends next year, was even a New Zealander.
At a protest outside Parliament earlier today, Wellington central MP Grant Robertson said he did not feel that Mr Key had adequately explained his role in the incident.
"[Mr Key] laughed and giggled along to something that was an offensive remark and he needs to be more upfront about what an appalling comment it was."
At his post-cabinet press conference this afternoon Mr Key disagreed, saying the law made it very clear that he was not allowed to interfere in the operational management of a state-owned body such as TVNZ.
"I made it quite clear last night that it was for TVNZs management to determine what the right course of action was," he said.
"I supported them when they decided to force both an apology and ultimately his suspension."
As for his reaction to the comments at the time, Mr Key said he had replayed the event in his mind over the last week or so, and was comfortable with what occurred, and anyway "what's done is done",
"In the first instance I genuinely thought he was asking a question about whether he was born in New Zealand, and that's a question I've had before, not about this particular governor-general but about whether governors-general need to be born in NZ," he said.
"With the third question, as I say, I was a bit taken aback by where he was going and frankly did not want to engage him on that."
On Friday the Indian Government told New Zealand High Commissioner Rupert Holborow it was annoyed at the Dikshit comments and Mr Holborow was handed a demarche, a formal protest. He also issued an apology to India.
Asked whether he felt India had overreacted to the incident, Mr Key said given the level of coverage it had in the Times of India, the Indian government might have felt it had made an appropriate response.
But it was important to put the statement into context, Mr Key said.
"These were the words of a New Zealand broadcaster and not someone speaking for the New Zealand Government," he said.
"Around the world there are lots of broadcasters and lots of comedians who say all sorts of things about other country's nationals and governments, in my experience, have the maturity to recognise that these are the views of a particular broadcaster."
As for Sir Anand's replacement, Mr Key said he had undertaken informal discussions with senior members of his cabinet, and had a list of three names as possible candidates.
Sir Anand's term ends in August next year and a replacement will have to be confirmed early in 2011.
