Prime Minister John Key has denied misleading the public by not telling Parliament of potentially illegal spying by the GCSB two months after GCSB director Ian Fletcher told him of the problem.
Cabinet Secretary Rebecca Kitteridge's report on the Government Communications and Security Bureau yesterday revealed that questions were last year raised over 88 instances over the last decade of GCSB surveillance on behalf of the SIS and Police .
Mr Key yesterday said Mr Fletcher first raised the issue with him in July last year.
However, Labour Leader David Shearer pounced on Mr Key's comment, saying the prime minister had claimed for months "that he knew nothing about illegal spying until September 2012".
"John Key is treating New Zealanders with contempt by being loose with the truth."
But speaking to New Zealand reporters China this morning Mr Key said yesterday's comment was "absolutely correct".
"I'd never had advice up to that (September) point that they've acted illegally.
"What was raised with me in July was that the Inspector-General had raised a question about how the GCSB Act might work in relation to the SIS Act. What he said was he wanted to go away and do further work on that. The advice I had from both GCSB and SIS legal team was that they believed, and I might add continue to believe, that the work that they were doing was absolutely legally correct.
Mr Key said Mr Fletcher's July advice was "like a long range weather forecast".
"It might tell you that there's a high or low out there, it doesn't tell you it's raining in Wellington."
Mr Key said he'd asked the chief executive of the Department of the Prime Minister and Cabinet to speak to State Services Commissioner Iain Rennie and provide him with advice about an inquiry into the leak of Ms Kitteridge's report and a decision whether to proceed would be made next week.
This afternoon in Parliament, Green Party Co-leader Russel Norman suggested the Government itself was the source of the leak as part of a "communications strategy" intended to divert attention away from questions around the process used to appoint GCSB director Ian Fletcher.
However, speaking on behalf of Mr Key, Deputy Prime Minister Bill English rubbished Dr Norman's suggestion as "ridiculous".
Mr Key says his Government will seek to change the law around the GCSB to ensure it is able to resume its assistance to the SIS and Police by spying on New Zealanders without concerns about the lawfulness of that work. That assistance is currently on hold until the law is changed.
However Labour and the Greens say the law should only be changed after an independent inquiry into New Zealand's intelligence agencies.
Dr Norman said Mr Key appeared set on rewarding the GCSB for its "illegal behaviour over the last decade".
"Changing the law to allow the GCSB to spy on New Zealanders would be out of step with other jurisdictions that separate domestic and international spying", he said this morning.