PM apologises over illegal, 'incompetent' surveillance

Prime Minister John Key has apologised to Kim Dotcom and New Zealanders over the unlawful surveillance of the internet millionaire, calling the Government's spy agency incompetent.

A top-level inquiry has found human error was at the heart of the Government Communications Security Bureau's illegal surveillance of Mr Dotcom.

Inspector-General of Intelligence and Security Paul Neazor has found the GCSB relied on incorrect police information about Mr Dotcom's residency status and didn't check further.

He also says the GCSB and the police misinterpreted the Immigration Act, which changed in 2010 altering Mr Dotcom's status and giving him protection from being spied on.

Mr Key says it was not a matter of conspiracy but the bureau made a mistake and has let itself down.

"Of course I apologise to Mr Dotcom, I apologise to New Zealanders because every New Zealander that sits within the category of holding permanent residency or a New Zealand is entitled to be protected from the law when it comes to the GCSB and we failed to provide that protection to them."

Mr Key says while he's ultimately accountable for the GCSB, it is an operational matter.

He told Radio New Zealand's Checkpoint programme while the mistake was a basic error he's expressed his annoyance to the GCSB.

Mr Dotcom, a German national, is fighting extradition to the United States to face copyright, money laundering and fraud charges.

Mr Key launched the inquiry on Monday after he was advised that the GCSB had broken the law.

The GCSB is to review its handling of past cases as far back as 2009 and will report back to the Prime Minister and Justice Neazor.

Bureau director Ian Fletcher has apologised for the mistakes, saying it will put in place a number of changes to regain the trust and confidence it has lost.

Mr Key says he won't ask Mr Fletcher to resign as he started the job after the illegal spying took place.

Listen to John Key on Checkpoint ( 8 min 20 sec )

Labour seeks wider inquiry

Labour Party leader David Shearer wants a commission of inquiry into the the unlawful surveillance.

Mr Shearer says the report ignores Mr Key's failure to oversee the security agency.

He says an independent and more thorough investigation has to be carried out, like a commission of inquiry.

Listen to Labour leader David Shearer on Checkpoint ( 4 min 50 sec )

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