Prime Minister John Key doesn't have a problem with Washington ambassador Mike Moore attending a function co-sponsored by tobacco giant Philip Morris.
Mr Moore has been criticised by anti-smoking MPs, including a government minister, for going to the Friday night dinner in the US capital.
It was sponsored by Philip Morris and Chevron Oil to bring together leading players in the Trans-Pacific Partnership free trade negotiations.
Mr Key says big companies often sponsor functions like that in the US.
"He was there for Trans-Pacific Partnership meetings and it's very important for New Zealand to be represented," Mr Key said.
"I'm comfortable with his actions."
Maori Party co-leader Tariana Turia, the minister responsible for smoke-free legislation, said Mr Moore's presence was an outrage.
Mana Party leader Hone Harawira said the ambassador should be sacked.
Free trade opponent Professor Jane Kelsey says Mr Moore was representing nine ambassadors whose countries are involved in the negotiations.
"Australian ambassador Kim Beazley declined to attend and it's an outrage that New Zealand's ambassador was acting as host to corporate lobbyists," she said.