Prime Minister John Key has come under fire in Parliament today over illegal breaches of security by the Government's spy agency in the Kim Dotcom case.
Labour leader David Shearer repeatedly asked Key if he stood by his previous statement, including not knowing who Kim Dotcom was until the day before police stormed his Coatesville mansion.
Shearer broughout out a blown-up photo of a fireworks display Kim Dotcom commissioned when he was granted New Zealand residency in late 2010 to "jog" Key's memory.
"I stand by my full statements in the context in which they were given," said Key.
Key maintained he was not briefed about the security breach until yesterday afternoon when the information came to light.
It has been revealed that the Crown's foreign intelligence agency, the Government Communications Security Bureau (GCSB), unlawfully intercepted information in the lead up to the police raid at Dotcom's mansion.
Court documents released this afternoon say a police agency sought the help of the Government spy agency the GCSB to track down Kim Dotcom and his associates prior to a raid on his Coatesville mansion.
The documents also show the agency OFCANZ, the Organised and Financial Crime Agency of New Zealand, gave the GCSB an assurance that all those being targeted were foreign nationals.
The GCSB is responsible for monitoring communications of foreign nationals, and can't monitor New Zealand residents or citizens.
That is the role the SIS, which requires a warrant from the Prime Minister to do so.
English knew a month earlier
Earlier today, the Prime Minister revealed that Deputy Prime Minister Bill English was aware of a Government agency's involvement in the Kim Dotcom case over a month before he was.
Key said English had signed a ministerial certificate while the Prime Minister was overseas in the United States to watch his son play baseball in August.
''There was a ministerial certificate that was signed. That's another technical issue, I haven't actually seen the paper work on that, that would have indicated that the bureau was involved,'' Key told media this morning.
"A ministerial certificate is in relation to information about whether the bureau has acted, because a court, or someone might ask, for that information. So, it's essentially a suppression order."
English said today that he "was involved in an administrative procedure related to the court".
"How all that fits in I'm sure will be covered in the inquiry that the Prime Minister initiated," English said.
The Finance Minister said he could not recall the contents of the documents, and he said he preferred not to comment further "because of the risk of misleading people or giving the wrong information".
After Key was told about the breach, he said the matter was then referred on to the Inspector-General Hon Paul Neazor - the independent authority charged with investigating any illegal breaches by the Government's intelligence agency.
Labour leader David Shearer said his understanding was that the Finance Minister "had signed the indemnity order", which puts New Zealand "completely responsible for any suit that might arise from this".
"That means that if anything goes wrong and Kim Dotcom decides to sue, the US is not going to be held responsible, only New Zealand,'' he said.
Key said he only found out about the GCSB's unlawful actions on Monday when the agency advised him. The agency had discovered it had acted unlawfully five days prior to that.
Internet NZ Chief Executive Vikram Kumar told TV ONE's Breakfast how the GCSB could not figure out that Dotcom and his co-accused are New Zealand residents is beyond him.
"You just have to sit there and shake your head the whole Kim Dotcom case is turning into a bit of a shambles for everyone," he said.
"Starting right from the beginning where you had the police raids on his house, you had the search and seizure being held to be unlawful, seizure of his property being a procedural error and you just have to sit there and say what on earth is going on here."
Kumar said that the Inspector General's report into the unlawful bugging needs to be made public.
"We really need to know and get to the bottom of this. The PM assures us that it happens very rarely and that he is 'quite shocked', but I think that the report out of this must absolutely be made public so we do get a better sense of trust and assurance that the GCSB is working within its jurisdiction."
Kumar said the case is not a good look for the country with the news of the illegal bugging hitting the headlines overseas.
"This isn't the story we want overseas about doing business in New Zealand," he said.
Meanwhile, privacy and law expert Tim McBride says a much more extensive inquiry is needed when the Dotcom case is over.
"I'm certainly one who thinks in the post 9/11 environment that our agencies are directed from Washington DC," he said.
McBride says the latest development in the case is bound to have wide reaching consequences.
He says the incident raises a number of credibility issues.
"If it's happened in this case you have to wonder if it's happened in other cases because this sort of behaviour has a chilling effect."