An activist who burned the New Zealand flag at an Anzac Day dawn service has had her conviction quashed by the Supreme Court.

Valerie Morse was convicted of disorderly behaviour after her protest near the Cenotaph in Wellington in 2007 against NZ's involvement in the Afghan and Iraq wars.

She was convicted in Wellington District Court following a trial later that year, in which witnesses said they were shocked at her actions.

The district court judge found Ms Morse's behaviour was an expression protected under the Bill of Rights, but that it was offensive in the context of an Anzac Day dawn service.

The conviction was upheld by the High Court and the Court of Appeal, but Ms Morse challenged that ruling all the way to the country's highest court and yesterday the Supreme Court quashed the conviction.

Its judgment found that the district court judge had misunderstood the meaning of offensive behaviour.

While the five Supreme Court judges differed in their definitions of "offensive behaviour", most believed it had to be capable of "wounding feelings or arousing real anger, resentment disgust or outrage".

"Because unanimously of the view that the trial in the District Court proceeded on a wrong basis in law through failure to assess impact on public order, the Supreme Court has set aside the conviction," the judges said in a written statement to the media.

Ms Morse last night told the Weekend Herald her action was a "significant message of dissent".

She said she had gone to court only to ensure no precedent was set.

"When young men and women go off to war, they go off under the flag of the nation. So when you burn the flag, you are sending a strong message."

Ms Morse, who will be back in court this month as a defendant in the Urewera Raids anti-terrorism case, said the group was not protesting against returned soldiers but was opposing New Zealand's role in Afghanistan, Iraq and the Solomon Islands.

She said politicians had politicised Anzac Day by equating the sacrifices made at Gallipoli and the Western Front with current deployments.

"We've said: 'we're opposed to the war, you've made it a political event, so are we'."

She said that in the right circumstances, she would consider burning the flag in protest again.

"The judgment of the Supreme Court really represents a victory for all New Zealanders, irrespective of their political beliefs."

The quashing of her conviction disappointed the Returned Services Association.

Its national vice-president David Moloney - who was running the Anzac ceremony at which Ms Morse burned the flag - said he was not personally offended by the flag burning but other returned servicemen would be.

He said a dawn service was not the place to protest about a current war.