The Prime Minister says New Zealand would have been willing to host the next Commonwealth Heads of Government meeting in 2015, but it is probably going to be in Malta.
Mauritius had been tipped to be the next host, but it has reportedly been dropped because it decided not to send its Prime Minister to this weekend's Commonwealth summit in Sri Lanka, in protest over human rights abuses.
Navin Chandra Ramgoolam is not attending the meeting in Colombo, saying there was "total lack of accountability" about human rights abuses during the ethnic conflict there.
He said a consequence of his boycott is that Mauritius would no longer hold the next CHOGM.
The prime ministers of India and Canada have also refused to attend the summit in Sri Lanka, which is accused of widespread human rights abuses in its defeat of Tamil Tiger rebels in 2009.
About a tenth of the population of Mauritius are ethnic Tamils.
John Key says a final decision had not been made about 2015 and New Zealand would have been happy to host.
However, he says Malta has also put up its hand, which would mean a better regional spread, given the 2011 host was Australia and the meeting will be held in Vanuatu in 2017.
No motion of no-confidence by NZ
John Key had earlier said he had no intention of moving a motion of no-confidence against Sri Lanka taking the chair of the Commonwealth.
The Green Party and Amnesty International say given Sri Lanka's past and present record on human rights, New Zealand should at least oppose it taking up the prestigious position.
The chairpersonship of the Commonwealth is automatically conferred upon Sri Lanka, as the host of this year's Commonwealth Heads of Government Meeting.
Mr Key therefore questions the point of a no-confidence motion, and says many countries would see it as an unnecessary embarrassment to the host.
He says it's a more constructive approach to engage directly and he will discuss human rights and the devolution of power to elected Tamils in the north with President Mahinda Rajapaksa.
Foreign Minister Murray McCully says it is hard to argue with those who want to see the people responsible for human rights abuses in Sri Lanka held to account, but he still believes New Zealand is taking the right approach.
Mr McCully has travelled to the north of the country, where the last months of the civil war were played out in 2009.
He says he accepts the concerns expressed by locals about the significant military presence, and how power is being devolved to elected Tamil representatives.
But Mr McCully says the evidence points to wrongs being committed by both government forces and Tamil rebels.
British Prime Minister David Cameron says the Sri Lankan Government needs to set up an independent inquiry on alleged war crimes during the final stages of the civil war, the BBC reports.
Mr Cameron told a news conference at the Commonweath summit that he had been forthright about his views when he met Sri Lankan President Mahinda Rajapaksa.
He says there needs to be a full, creditable independant inquiry to help Sri Lanka's reconciliation.