Prime Minister John Key says he has seen information that suggests a prisoner who died after being transferred from Mt Eden Prison was not dropped from a balcony.
The Corrections Department is taking over the day-to-day running of the prison after allegations of prisoner violence.
Police and the prison inspectorate are investigating the death of Nick Evans last month.
In Parliament this week, Labour MP Kelvin Davis said "Prisoner Evans" was dropped from a balcony at Mt Eden before his transfer to a Northland jail.
Mr Key told TV'3 The Nation he understands Mr Evans was inspected and did not display injuries consistent with someone who had been thrown over a balcony.
The Prime Minister said his faith in the private prison sector would not diminish, despite allegations of violence at the Serco-run Mt Eden Prison.
He said he would consider terminating Serco's contract if the operator was found to have failed to meet the terms of its contract, but that any failure would not affect what he describes as the Government's happy marriage with private providers.