A leaked diplomatic cable shows the United States was deeply concerned with "inherent weaknesses" in New Zealand's terror laws following the decision not to prosecute under them after the Urewera terror raids.
The November 2007 cable, released online by whistleblower organisation WikiLeaks last week, shows the decision not to prosecute the 17 people arrested in the October 2007 raids under the Terrorism Suppression Act (TSA) was met with alarm at the US embassy in Wellington.
"In the post-9/11 world, one would expect that New Zealand would have an adequate law to deal with foreign as well as domestic terrorism - it does not," the then US ambassador, William McCormick, said.
The cable noted the TSA was not designed to apply to domestic terrorism, but added that "one wonders if it would have applied to foreign terrorists plotting much the same activities".
Mr McCormick said the "inherent weaknesses" of the law highlighted that the Labour government and its support partners - "many of whom are veterans of Vietnam War-era street protests" - were uncomfortable with any laws that might clamp down on freedom of expression.
The cable expressed hope that the Law Commission's now-stalled review of the terror laws would strike a balance that would "find a way to preserve peaceful political dissent and civil liberties without leaving the country vulnerable to those - foreign or domestic - who would do it harm".
The commission's review has been delayed, partly because firearms charges for those arrested in the police raids are ongoing.
The cable also noted that the embassy had been told by New Zealand police that it expected those facing the firearms charges to "escape incarceration", and were instead likely to pay only a fine.
It said the police raids had "jolted New Zealand" and described Solicitor-General David Collins' decision not to prosecute under the terror law as "a landmark decision".
Later cables show the embassy in Wellington continued to follow the outcome of the police raids with interest.
A December 2008 cable noted the acquittal of one of the 17 people initially arrested in the raids, and the contempt trial against Fairfax Media after the Dominion Post published extracts from transcripts relating to the raids.
The Supreme Court is today hearing an application from some of the Urewera accused to be given leave to appeal against a High Court decision to deny them a jury trial.
There are now 18 defendants, 15 of whom are due to defend charges under the Arms Act at a trial in Auckland beginning on May 30.
Five of them will also defend charges of participating in an organised criminal group.
The other three also face firearms charges but their trial will be held separately.