The case against accused internet pirate Kim Dotcom has taken another blow after revelations the internet tycoon was illegally bugged by the Government's Communications Security Bureau (GCSB).
Prime Minister John Key says the GCSB made a mistake.
“Cant go into the details of that all I can tell you that on the information I received from the director last Monday it is my belief that GCSB acted unlawfully.”
At his post-cabinet press conference, Mr Key confirmed that ministerial warrants were required to spy on New Zealand citizens or residents and when that happened it was carried out by the Security Intelligence Service, not the GCSB.
"If the people were New Zealand residents or citizens and met the test of requiring a warrant I would have to sign that warrant," he said.
"But it was not believed any of those individuals met that category."
Labour, NZ First and the Greens want to know why the GCSB was involved, why Mr Key didn't know what was going on and why the security authorities apparently thought the internet tycoon was a threat to national security.
Police arrested Dotcom and three of his associates in January.
Dotcom and one of his associates, Bram van der Kolk, are New Zealand residents.
NZ First leader Winston Peters says Mr Key is responsible for the GCSB and has failed to oversee its activities, which amounts to "dereliction of duty".
Green's co-leader Russel Norman says it's hard to see why the GCSB was involved at all because Dotcom isn't a threat to New Zealand's security.
Labour leader David Shearer says Mr Key must explain why the GCSB was involved in illegal spying.
"This is a shocking breach of New Zealand's very strict laws restricting the ability of our spy agencies to snoop on people."
An inquiry is now underway into the security bureau's eavesdropping.
This is another hurdle in efforts to extradite Dotcom to the US on charges of copyright infringement, racketeering and money laundering, as the search and seizure warrants used for the raid on his mansion have been ruled unlawful as well.
His mansion was raided on January 20 with helicopters, armed police and dogs and Dotcom then spent a month in jail before finally getting bail.
3 News / RadioLIVE / NZN