New Zealand's Agriculture Minister reversed his ban on the kosher slaughter of poultry last week amid allegations that his original controversial decision was taken to appease Muslim countries which have lucrative trade agreements with New Zealand.

Lawyers acting for David Carter negotiated a settlement last Friday, just three days before a legal challenge, which was being closely monitored by Shechita UK as well as the Office of the Chief Rabbi, was due to open in the High Court in Wellington.

The Orthodox Jewish community in Wellington and Auckland filed legal action in August after negotiations broke down with Mr Carter over his May 27 ban on the commercial slaughter of all animals without pre-stunning, which rendered shechitah unlawful and enraged the 7,000-strong Jewish community.

Last Friday's partial agreement only allows for the shechitah of poultry; lamb is still under negotiation while kosher beef will continue to be imported from Australia.

But Mr Carter remained defiant this week, saying that although the agreement was "probably the best and fairest," killing animals without pre-stunning was "frankly cruel".

His comments came a day after the New Zealand Herald On Sunday published blistering allegations that Mr Carter was advised that giving preferential treatment to Jews might adversely affect profitable trade deals with Muslim countries.

The newspaper also revealed that Mr Carter owns shares in Alliance Group Ltd, which exports meat to Muslim countries.

But an angry Mr Carter insisted: "Animal welfare was the primary consideration in making this decision." Prime Minister John Key, whose mother was a Jewish refugee who escaped Europe on the eve of the Holocaust, defended his minister and said he had "no concerns" with the way Mr Carter had acted.

David Zwartz, a spokesperson for the Jewish community, accused his compatriots of hypocrisy. "There are double standards here in what is being required of the Jewish community and what is being required of New Zealand society as a whole."