Prime Minister John Key is denying New Zealand is involved in a combat role in Iraq.
Mr Key slammed a report in British newspaper The Guardian that said New Zealand troops were involved in fighting as "just plain wrong".
New Zealand has about 100 soldiers at Camp Taji, north of Baghdad, where they are training Iraqi troops.
Mr Key also denied SAS soldiers had been seconded to British forces.
"As we've always said, from time to time, you will get very small numbers of SAS that may go for a VIP visitor, for instance, or force protection or other particular things - they're very small numbers.
"We can categorically point out we haven't deployed the SAS in a combat capability either above or below the line in Iraq."
Mr Key said it was possible British journalists were confusing New Zealand and Australian soldiers.
The article in The Guardian quoted Kurdish Peshmerga officers as saying the New Zealand SAS was present near Bashiqa, one of the front lines north of the Islamic State controlled city of Mosul.
Defence Minister Gerry Brownlee yesterday reiterated that the government had ruled out sending the SAS or any other troops into combat roles in Iraq.
In June, the government said up to 143 New Zealand defence personnel would be based at Camp Taji to train Iraqi Security Forces (ISF) in the fight against Islamic State until November 2018.