Prime Minister John Key's office is denying the fibre-optic cable that links New Zealand with the world is being intercepted.
A document shows a United States National Security Agency engineer was in the country in February last year to discuss how to intercept traffic on the Southern Cross fibre-optic cable with New Zealand's electronic spies.
New Zealand lawyer Denis Tegg found a reference to the engineer's visit in unclassified NSA papers saying he was in New Zealand for technical discussions regarding a future Government Communications Security Bureau SSO site.
SSO stands for Special Source Operations, which have the ability to tap countries' fibre-optic cables so phone calls, internet and email use can be intercepted.
Green Party co-leader Russel Norman said on Friday the revelation about the meeting in Blenheim, where the GCSB has its Waihopai spy base, is extraordinary. He said the Government needs to be honest with New Zealanders about whether they're being spied on using powerful US technology.
"This is about establishing an interception point on the Southern Cross cable that connects New Zealand to the rest of the world, he said."
"When you're on the phone talking to someone overseas, your communications are going down that cable. When you're sending emails offshore they're going down that cable and any time you're on the internet it's connecting offshore, it's going down that cable.
"And John Key now knows what you're doing, because he's put an interception point on it."
Dr Norman told Radio New Zealand's Checkpoint programme that, as the minister in charge of spying agencies, Mr Key must have been aware of the plans.
"What we don't really know is whether it's the GCSB that wants to do it for its own purposes and is just getting some support from the US government, or whether it's the US government that wants to add it to their network and are getting help from the GCSB to do it."
Dr Norman said at the same time as the NSA visit, Mr Key was assuring New Zealanders their privacy would be protected despite sweeping new powers granted to GCSB.
"It's a major policy decision to put one of these interception devices on the only cable in and out of New Zealand which can intercept all of our international communications, so it's incredible that Key didn't tell us what he was doing during that debate."
But a statement from Prime Minister John Key's office on Friday said no such programme operates in New Zealand, nor is there an intention of introducing one.
The statement said they don't use the term SSO and what is being referred to is a "cable access programme". However, there is no explanation of what that is, or why someone was in New Zealand from the NSA to discuss it.