Labour's foreign affairs spokesperson says Winston Peters' comments about former Australian foreign minister Bob Carr were unstatesmanlike.
It comes after the foreign affairs minister made comments about Carr in a Morning Report interview on Thursday about the AUKUS military pact.
Carr confirmed on Thursday evening his lawyers had written to Peters saying they intend to take him to court for defamation.
The Labour Party was calling for Peters to be sacked from his ministerial role and said the attack on the senator was a new low for politicians here.
Prime Minister Christopher Luxon was standing by Peters.
Carr has been contacted for further comment.
Labour's David Parker told Morning Report he was surprised by Peters' comments, and had never heard a current minister of foreign affairs speak about a senior, retired politician from another country in this way.
He said he could not see how Carr's views on AUKUS differed from those of some former New Zealand and Australian politicians.
"What's the difference between what Mr Carr has been saying and the former ACT Party leader, the honourable Richard Prebble who said it's lunacy to join a military alliance aimed at our biggest trading partner, or former National Party leader Don Brash saying 'why on Earth would we join AUKUS in any form' or former Australian prime minister Paul Keating saying the AUKUS pact is, quote, 'the worst deal in history'."
Parker said Carr had simply come to New Zealand and participated in a public debate in Parliament, yet he was the only person subjected to a "defamatory" attack by Peters.
The incident was not likely to cause long-term ramifications between New Zealand and Australia, Parker said, but it was still "the wrong thing to do".
Parker said there was a "real nervousness" surrounding AUKUS.
The Labour Party had looked into AUKUS when it was in power but it was not something to rush into, he said.
"It's true to say that we looked at AUKUS, or started to look at AUKUS, but there's a lot of questions to be answered and we don't think that the case has yet been made out to join AUKUS.
"It's a very, very serious foreign affairs issue and there has been no public debate about it.
Parker said it needed to be a transparent process with the pros and cons considered carefully.