The man who was molested by Phillip Smith as a child, and who watched Smith murder his father, said he could now carry on with his life "without having that fear over my shoulders".
The victim, who now lives in Australia, told Campbell Live that he had been terrified while Smith was at large.
He said it was "great news" that he'd been captured.
"It's great news, it's excellent. I'd like to thank the New Zealand police force, they've done a great job, and everybody else."
Police are working through options to return recaptured fugitive Phillip Smith to New Zealand, including deportation, extradition, or Smith willingly returning.
Police commissioner Mike Bush said he had spoken to Brazil's ambassador to New Zealand to thank him for swiftly recapturing Smith in Rio de Janeiro today.
"I told His Excellency Mr Eduardo Gradilone that we were very grateful for the outstanding work undertaken by the Brazil Federal Police in locating Mr Smith and placing him in custody," Mr Bush said.
"The co-operation we have received from the authorities in Brazil has been excellent and is testament to the relationship we have built with law enforcement agencies there in recent years."
Police are now working with authorities in Brazil to arrange Smith's return.
New Zealand Police and the Interpol Wellington bureau met this morning with officials from MFAT, the Department of Internal Affairs and the Ministry of Justice to work through the options, Mr Bush said.
These include deportation by the Brazilian Government, extradition, or Smith electing to return voluntarily.
Assistant Commissioner Malcolm Burgess said police must respect the legal processes of Brazil and work with authorities there.
"There are a number of complexities involved," he said.
Police and other agencies were focused on making the right decisions so Smith was properly returned to New Zealand and put before the courts.
"I am unable to put a timeframe on when this might happen - it could occur very quickly or it may take some time," Mr Burgess said.
"We will have a better idea of timing once the process to bring Smith back to New Zealand has been clarified between authorities here and in Brazil.
"We will keep the victims informed of the process as we work through it.
"It is very satisfying for us that these victims know Smith is in custody where he should be and unable to re-victimise them."
An Emergency Travel Document (ETD) was being prepared to allow Mr Smith to travel once the necessary arrangements were in place.
Speaking in Rio de Janeiro, New Zealand Police liaison officer Detective Superintendent Mike Pannett said he was grateful for the prompt apprehension of Smith by the Brazil Federal Police.
Phillip Smith was arrested at the Cidade Maravilhosa hostel. Photo / AP
"We are also grateful to the public in Rio de Janeiro who have shown very good vigilance in knowing that Smith was in their community."
Smith faces a charge of escaping the custody of Corrections on his return to New Zealand, which carries a maximum penalty of five years imprisonment.
Police said the investigation by the Auckland inquiry team into Smith's escape is continuing.
"Obviously we will want to speak to Mr Smith at an appropriate point to hear his version of events," Mr Burgess said.
"In the meantime the inquiry team is pursuing numerous lines of inquiry and are building a clearer picture every day of the circumstances around Smith's absconding."
It was a case of very good policing by the Brazilian federal police, Mr Burgess said.
He said police were still unsure as to when Smith would return.
"It depends on the legal process or how it plays out ... That's something authorities here are working on."
Mr Burgess said police were unsure yet as to whether they would be laying charges against Smith's sponsors.
Smith had not been invited to make a statement to New Zealand or Brazilian police at this stage, Mr Burgess said.
Mr Burgess said there was an "element of luck" involved in catching Smith so quickly.
He said Smith was identified through assistance from people in Brazil and the authorities following up and doing enquiries.
"When they checked his room they found him there, his passport and pretty much it was game over.
"They have done an outstanding job we are talking about a city of 10 million people and they picked him up so quickly."
Mr Burgess said Detective Superintendent Mike Pannett was not there when Smith was arrested.
"He was in Brazil, he was in Rio, but he wasn't present at the arrest."
He said he wasn't sure how long it took Brazilian authorities to arrest Smith after they were alerted of his presence at the youth hostel he was staying at in Santa Teresa.
"All I know is at 2.30am a lot of us got very welcome phone calls.
"There is no lack of will on the part of Brazilian authorities to have Mr Smith returned back to New Zealand."
Smith had breached Brazilian immigration law, and police were not sure when he would next be back in court.
"It may be days or it may be weeks. We anticipate we will get a further indication in the next 24 or 48 hours."
He has been remanded in custody for 60 days and will be incarcerated at Ary Franco, a notorious Rio prison once condemned by the UN.
Smith has shown "no emotion" since he was taken into custody in Brazil early this morning.
Smith was arrested by Brazil Federal Police just after he was recognised by someone at a hostel in Santa Teresa, Rio de Janeiro.
Smith checked into the Cidade Maravilhosa youth hostel yesterday morning where he shared a room with three others.
At a press conference in Rio this morning Detective Superintendent Mike Pannett,
the New Zealand police liaison officer in Washington, told media gathered Smith hadn't shown any emotion since he was arrested.
Mr Pannett was the New Zealand police liaison sent to Brazil and formally identified Smith when he was taken into custody.
"I think he was surprised to see a New Zealand police officer here. Having said that, he has been very quiet since his apprehension and just considering his situation."
Smith is led away by police. Photo / AP
How the arrest unfolded
Local journalist Alexandre Tortoriello said Smith was arrested after someone at the hostel recognised him from a news report and alerted authorities.
The hostel in Santa Teresa, a hill-top neighbourhood in Rio de Janeiro's Southern Zone, is popular with tourists.
"He told everyone he was an Australian citizen, and people said he was very convincing," Mr Tortoriello said.
"[The hostel] is very afraid of him being released and coming back here, so they won't tell anyone their name.
"Until the Federal police give a statement we don't know if he is just being questioned and will be released or whether he has been arrested."
"Smith was using the name James Paul Andrews while he was at the hostel."
Smith was sharing a room in the hostel. His is the lower bunk bed. Photo / Bruce Douglas
"It's not clear yet whether he will remain in custody or not because we don't know the legal grounds of the detention."
Mr Tortoriello told the Herald Smith had slept in a six-bedroom dorm with three others.
He tried to convince one of his roommates to drive him to Sao Paulo to go sightseeing, he said.
Coincidentally, Santa Teresa was where Ronnie Biggs, the Great Train Robber, lived much of his life in Rio. A press conference will be held by the Brazilian Federal Police later this morning.
New Zealand police were working with the Brazil authorities, Interpol and Ministry of Foreign Affairs and Trade to make arrangements to return Smith to New Zealand.
Police notified Mr Smith's victims of his arrest early this morning.
Victim's family: We're "very relieved"
Lynda, the sister of Smith's murder victim, said she was "ecstatic" with the news he was in custody.
"Obviously the family is very relieved and very grateful that he has been found, and let's hope he stays in custody this time," she said to Radio New Zealand.
She said her nephew, who was sexually abused by Smith as a child, was happy with the news.
"He wants to get on with his life."
Lynda said she was waiting for more information about what will happen to Smith.
"We'd certainly like to have a heads up on what's going to happen next ... we're certainly hoping he stays behind bars and rots in there."
She said he family always had faith that the police would do everything they could to capture him.
"The good thing for us is he's obviously not as clever as he thought he was."
She said her family could come out of hiding now.
Police Minister: Brazilian authorities 'energetic' in pursuit
Police Minister Michael Woodhouse said he was relieved for the families of Smith's victims that he was captured swiftly.
"They must have gone through hell over the last five days, and not knowing where he was would have been a tremendous concern."
He said he was grateful for the work of the New Zealand Police and Brazil's Federal Police.
"The Brazilian authorities have been quite energetic in pursuing him, we're very grateful for that, it's got the right outcome."
Mr Woodhouse said it was the success of "good old-fashioned police work" that led to Smith's capture.
"There's no doubt that with every passing day the trail would have got a little colder.
Smith had resources, and he's resourceful, so the question of identity change and document usage and location were always going to get harder the longer this went on, so the best time to get him was the first few days," Mr Woodhouse said
He said a person in the hostel Smith was staying in recognised him, despite him assuming another identity.
"While there was a number of quite sophisticated lines of inquiry being pursued it was simple identification of places where he might have been hiding out that ultimately led to his arrest, where his image was communicated to hostels and internet cafes and so on."
Smith initially denied he was the man wanted by police.
"After initially denying that he was who he was, he capitulated in the face of that questioning and was formally identified by Detective Superintendent Mike Pannett.
"The long arm of the law had to stretch quite a long way this time, right across the Pacific and into Brazil."
Lawyer: Not much I can do for him now
Tony Ellis, Smith's former lawyer, told Radio New Zealand that Smith had contacted him through the New Zealand embassy in Rio de Janeiro.
"They were wanting me to phone him but by the time I got up and realised what the time zone was I was too late but somebody has been organised to hopefully represent him [in court]," he said.
Mr Ellis said he could do very little for Smith now.
"I would have thought as his passport has been cancelled he's likely to be unlawfully in Brazil, so I would imagine they would try and deport him rather rapidly because that is a much easier process than extradition so he could be back her back quickly."
Ary Franco prison, where Smith will be staying in Brazil, was recommended for closure after the UN completed a report in to the prison.
The UN found the cells to be bug-infested and there were many cases of torture and abuse within the facility.
Victim: Corrections never told me of escape
Phillip John Smith's victim has not slept since the day he found out his tormentor had escaped, and he has taken to keeping a knife under his bed.
And he has revealed that the Corrections Department did not contact him directly to tell him the convicted paedophile and murderer had absconded while on temporary release from Spring Hill Prison.
Yesterday, new details emerged about Smith's last days in New Zealand and escape to South America.
• His half-sister Joanne Smith sponsored his release and flew from Palmerston North to pick him up from the prison last Thursday.
• Ms Smith's partner said she left Smith with another sponsor. It is suspected he took a taxi to Auckland Airport, got on a plane to Santiago, Chile, and later flew to Brazil.
• Police executed search warrants yesterday at Ms Smith's house and a laptop and other items were taken. A safe deposit box in Auckland was also searched.
• A fresh charge was laid in the Auckland District Court against Smith, for escaping from Corrections' custody.
In his first interview since the escape, the son of the man Smith murdered in 1995 told TV3's Campbell Live about his last encounter with his tormentor.
When he was 13, he woke to find Smith, who had been molesting him for three years, standing over him in his bedroom. Moments later, Smith stabbed his father to death in front of him. Smith had stalked the victim's family after they moved cities to get away from him. He went on to harass them by phone from prison.
"He has threatened us, he wanted to do the whole family. He had a hit list to kill the whole family," he told Campbell Live.
"I've had to try and rebuild my life from what he's taken from us, and it hasn't been easy. I finally feel that I'm finally getting somewhere in my life, and now he's robbing us of it again. I'm scared of him, for my family as well."
The man, now a father himself, said he went to bed with a knife under his bed.
"I need answers. I can't - me and my family can't - go through out lives knowing he's out there somewhere."
The victim, who has moved to Australia, said he was disappointed with Corrections, which did not contact him when Smith fled.
He said authorities had only reached out after his interview with the TV channel.
"When this dies down, are they just going to just throw a blanket over it, and we're meant to just carry on with our lives?"
Corrections boss: "We got this one wrong"
Corrections chief executive Ray Smith told the Herald the department had contacted the victim's mother about Smith's escape, because her name was down as the "nominated representative". He understood she had told the victim.
The department only became aware he wanted to be contacted directly after last night's television interview, he said.
"If he would like to meet, then I will find a way to arrange that, to follow up things. For me, it's about picking the right moment and I'd like to certainly have a good amount to talk to them [the family] about, so I can be very clear about what happened and what steps we're taking to improve the situation."
Mr Smith also apologised for how the department had handled Phillip Smith's case.
"I think we got this one wrong. I will do everything I can to fix this."
Minister of Corrections Peseta Sam Lotu-Iiga was pleased Smith was arrested and commended the work of New Zealand and Brazilian police officers, and Interpol in his recapture.
"New Zealand authorities are now working with their international counterparts to bring the prisoner back to New Zealand to face justice."
Smith's stepfather Basil was "very very relieved" he has been captured, a friend told the Herald.
"He's had a few restless nights."
Smith spoke yesterday about his escape, saying in an email to Radio New Zealand that he fled New Zealand to "escape the vigilante justice system that operates there".
"I made a definite decision to leave the country after the outcome of my most recent parole hearing, and the advice that I received subsequent to it in terms of my prospects for parole," he wrote.
Smith had said he hoped to remain in his host country indefinitely and had no plans to ever return to New Zealand.
How easy will it be to get Smith back to NZ?
Police Minister Michael Woodhouse said New Zealand did not have a formal extradition treaty with Brazil, which prompted concerns that returning Smith to this country could be a lengthy, complex process.
But he said Smith could be liable for deportation, which would be a simpler process than extradition.
Smith was not travelling on a valid travel document and he had failed to disclose his convictions when entering Chile and Brazil, meaning he was in the latter country illegally and could possibly be deported.
University of Auckland international law expert Bill Hodge believed if Smith was caught, he could be deported from Brazil based on problems with his visa.
"Then [they would] simply send him to the airport to deport to a place where an airline will carry him, and that will be in the first instance, Santiago, Chile - where they will deport him further out of transit back to New Zealand."
The journey home
A expert says Smith could start his journey back to New Zealand as early as tomorrow, a law expert says.
University of Auckland international law expert Bill Hodge said he believed Smith would be deported back to New Zealand, as opposed to being extradited.
Dr Hodge said Smith could be deported if his temporary visa was revoked and it was a simple process.
"We are talking about simply revoking his legal status in that jurisdiction, that is simple, common, administrative, and quick.
"That could be done tomorrow."
He said from there, officials would simply send him to the airport to deport him to a place where an airline would carry him.
Dr Hodge said Smith would likely be taken to Santiago in Chile, where he originally arrived in transit.
From there would be deported back to New Zealand.
"New Zealand is a place which will receive him because he was born here and has a right to come here."
"He'll have a police officer on his right hand and left hand to bring him back to Auckland as a person deported, not as a person extradited."
Yesterday Smith boasted that it was "highly unlikely" he would be returned to New Zealand under Brazil's laws.
Smith told Radio New Zealand he chose Brazil because he believed New Zealand would have "considerable difficulty" extraditing him back.
After his arrest, Smith appeared in court this morning in Brazil in relation to the Red Notice and the New Zealand arrest warrant.