Authorities are to take urgent action to monitor rapidly increasing drone activity after conceding they know of as few as one in 10 unmanned flights.
Concerns about civil aviation, public safety and privacy are cited as reasons for more robust regulation.
Those involved in the industry say the Civil Aviation Authority faces a huge task to try to track the use of unmanned aerial vehicles (UAVs), or "drones" - and are already way behind.
"There are hundreds and hundreds of these things around, being used for recreation," said one commercial operator. "You can go online and order the parts and have them on your doorstep five days later and be building one ... the privacy issues need to be acknowledged."
UAVs are piloted remotely, range from a few grams in weight to full-size aircraft, and are powered by gas turbine, piston or electric engines.
As technology improves and costs drop, UAV use in New Zealand has rapidly increased, with many recreational users buying the basic kit online and assembling them at home.
Documents released to the Herald under the Official Information Act show authorities are to take urgent action.
"As the size and use of [UAVs] grows, the risk to other aircraft or airspace users, the public and public property is real and is being addressed internationally with some urgency," reads a scoping paper. "The issue could be regarded as critical since New Zealand is vulnerable to the consequences of an accident."
A working group including those in the industry, the Ministry of Transport and the Defence Force has been established to help develop policy and risks, including "noise, privacy and security".
Internationally the use of drones for recreational and commercial purposes is rapidly increasing, the CAA documents note, and the true extent of UAV use in New Zealand is unclear.
"CAA estimate is that we know about 10 per cent of the activities [to be confirmed]."
Eight organisations had been authorised to operate UAVs in New Zealand as of March 14. The companies are all commercial operators, although three have links to military use.
One, Air Affair, has been authorised to operate a 50kg Phoenix drone system, owned by the Defence Force, as a targeting system in military areas, which have segregated airspace.
Another, Skycam UAV has developed the 2.3m wingspan Kahu, which is now used in a "limited interim capability for military tasks", according to the Defence Force.
Police used external companies to operate drones in two criminal investigations last year.
Authorised operators are limited to using smaller drones that must fly only within the unaided line of sight of from the pilot, or observers in direct contact with the pilot.
Commercial use ranges from 3D imaging and photography, inspecting power pylons, movie-making, and real estate photography.
Michael Boardman, of Raptech, bought a $70,000 Cyberquad Maxi drone - which weighs a couple of kilograms - after realising it could be put to use in his work examining power pylons with LineTech Consulting.
"The national grid - Transpower - have got somewhere in the region of 26,400 lattice steel towers in varying degrees of age and condition.
"We used to climb these things on a regular basis, and health and safety meant that was a slow process. I thought there must be an easier way. [The UAV] reduces risk. We can do five pylons in a morning."
According to the CAA, Transpower has scoped requirements for use of a 150kg UAV at a cost of $5 million to monitor and maintain its power line network. Simon Baumfield, an award-winning Wellington cinematographer, has built his fleet of five UAVs from scratch, importing the airframes and electronic motor package from a variety of overseas suppliers.
Eight years ago he began putting still cameras on to small electric model planes, and got into proper UAVs about three years ago when a convergence of technological breakthroughs put them in reach of ordinary people.
His biggest UAV has a diameter of 1.2m, eight rotors, and is worth about $20,000.
The smallest is 450mm across, and costs about $5000 with equipment.
The benefits of the technology to his company Sky-Hook TV are immense, he says.
"It allows you to get into this untapped area ... in the right conditions, when you put the camera on a UAV, you can just go anywhere and do anything."
Mr Baumfield said there were obvious privacy issues that would need to be addressed by the CAA. He estimated the authority knew of less than 10 per cent of commercial activity and only 1 per cent of recreational flights.
"If you don't really know what you're doing and you're a bit of a cowboy, there are risks - we don't fly across roads in traffic because we don't want people looking up and getting distracted. There are the privacy issues, there's all of that."
Professional photographer and drone operator Tim Whittaker says everyone in the authorised industry would welcome regulation - so long as it is not unreasonable.
Mr Whittaker, who has four UAVs, the largest worth about $15,000, said most recreational users would choose to operate illegally if regulation was too onerous.
"People need to want to be part of the controls. If they over-regulate, people will go, 'oh well, I'll just plead ignorance and do it until they catch me'."
The Hawkes Bay photographer used his UAVs for jobs ranging from television and advertising filming to real estate photography and video, and said in such situations there was no threat to civil aviation or the public. His smallest UAV was very light and quiet, and kitted out with First Person Viewing, which means the pilot looks through video goggles to fly from the drone's perspective.
"That is more suited to reconnaissance, spying type stuff. And I'm currently talking to the fire brigade and the police department for using that for their purposes."
He said such technology would be invaluable for situations like the 2009 "Napier siege", where a gunman kept police at bay for three days.
"It took two days to get a robot down to smash-in the backdoor ... we could have easily flown up to a window and looked in, using these goggles.
"It's relatively cheap ... if it got blown out with a double-barrelled shotgun, well, better than a person."
Who can fly drones in NZ airspace
• Hawkeye UAV Ltd - purpose not provided. Company says main business in NZ is 3D mapping for commercial clients such as mining companies. Also works closely with the Defence Technology Agency (DTA).
• Booma Film Ltd/Sky-Hook TV - filming for movies and documentaries.
• Tim Whittaker Photography Ltd - jobs ranging from television and advertising filming to real estate photography and video.
• Raptech - checking power pylons for rust and other maintenance issues.
• Air Affair Pty Ltd - purpose not provided. Operates a Defence Force-owned drone system as a targeting system in military areas.
• Skycam UAV NZ Ltd - purpose not provided. Business in NZ includes aerial photography and 3D mapping. Developed the Kahu drone, which is now used by the NZDF.
• Golding Ltd - aerial photography and imaging.
• Sycamore Ltd- aerial photography and imaging.
Source: Civil Aviation Authority, authorisations as at March 14, 2013