PM's admission changes story he gave days ago about his awareness of case.
John Key sat through a briefing on the Kim Dotcom case just weeks after the high-profile raid but says he completely forgot about it - a change to the story he gave Parliament days ago.
The admission from the Prime Minister came after he blamed "brain fade" at the Government Communications Security Bureau for illegal spying on Mr Dotcom.
Mr Key's acknowledgement he was told of GCSB's involvement has fuelled Opposition criticism of his oversight of New Zealand's spy agencies.
Last night, Labour leader David Shearer said: "Suddenly it's John Key having a brain fade."
Further details emerged yesterday in the spy scandal, including:
GCSB director Ian Fletcher's admission to Mr Key that there was a forgotten briefing.
Three cases since 2009 involving the bureau and the police which might also be illegal.
A further 55 GCSB cases sent to Intelligence and Security Inspector-General Paul Neazor to check if the bureau's analysis of legality holds up.
Mr Key said he was told about the operation on February 29 while visiting GCSB. During a briefing, he was shown a presentation which included a montage of 11 images. Among them was one of Mr Dotcom, who had been arrested a month earlier for copyright violation in a high-profile raid.
"There was a montage screen. It was on the bottom right-hand corner ... It was put up on a laptop in front of me. I do vaguely remember the screen ... It's a very tiny icon."
Mr Key said speaking notes for the briefing referred to the GCSB working for the police. The Organised and Financial Crime Agency's arrest of Mr Dotcom was given as an example.
"I have no memory of that. The director has no memory of that."
He said the discovery of the briefing came after he asked GCSB director Ian Fletcher if he was "absolutely crystal clear ... there was nothing else".
A further check revealed the February 29 briefing.
Mr Key said a review of the bureau's work with other government agencies showed it had assisted on 58 occasions in three years. "In 55 of the 58 cases we are quite satisfied GCSB has acted legally."
In one of the remaining cases, police asked the GCSB to get call-data records belonging to a NZ citizen. The records were not supplied but the spies told officers the phone was active. The other two cases were technical assistance from GCSB in cases in which the police had warrants. He said further inquiry was being made in the three cases to see if the law had been broken.
The questions over the bureau's assistance to police followed a 2008 police memo, obtained by the Herald through the Official Information Act.
It raised "issues and problems" with requests made by police to Telecom and reminded officers they needed a search warrant or signed permission from the Telecom customer to access call data.
It stated: "As a general rule, Telecom will not answer requests along the lines of 'is there anything there worth me getting a search warrant for'."
Police said the memo was sent out as a reminder and not because of any actual instances.
The GCSB's unlawful spying on Mr Dotcom is being investigated by police after a complaint by Green Party co-leader Russel Norman. The Secretary to the Cabinet, Rebecca Kitteridge, a lawyer, is also carrying out an internal review of the bureau's processes.
Dr Norman said: "Mr Key's right, there was a brain fade. It turned out to be his."
Who was told what when?
Jan 19: Solicitor-General David Collins, QC, tells John Key that Kim Dotcom will be raided the next day.
Jan 20: GCSB tells Roy Ferguson, director of the intelligence co-ordination group in the Department of the Prime Minister and Cabinet, of its role in monitoring Dotcom for the police.
Feb 29: During a briefing to Key, GCSB mentions its role in assisting police by monitoring Dotcom.
Aug 9: The police's Ofcanz deputy head, Grant Wormald, tells High Court of the involvement of an unnamed Government agency in the planning of the Dotcom raid.
Aug 15-17: Acting PM Bill English learns of GCSB's involvement and issues a Ministerial Certificate suppressing court disclosure.
Sep 7: Affidavit filed by Dotcom lawyers prompts GCSB to conclude it acted unlawfully.
Sep 13: GCSB tells Key's chief of staff of a potential issue of illegality.
Sep 17: GCSB briefs Key on its unlawful spying.
Sep 24: Key tells public and announces inquiry.