As a result they refused to grant Taylor parole and stood him down until March next year.
It is understood Taylor is disappointed with today's decision as it means he will spend another Christmas behind bars away from his family, who he is extremely close to.
Last week the Herald revealed that Taylor planned to study towards a formal legal qualification when he is released with a view to helping people who cannot afford lawyers.
Taylor has more than 150 convictions for offences including bank robbery, burglary, fraud and drugs.
He has been behind bars on and off for 38 years and is currently doing his time at Auckland Prison.
Taylor became infamous in 1998 after he escaped from the maximum security prison at Paremoremo north of Auckland.
He and three others including double murderer Graeme Burton managed to break out of the prison and make their way to the Coromandel, where they hunkered down in luxury holiday homes and the bush to evade authorities.
In recent years he has been in the headlines for his role as "jailhouse lawyer".
From Paremoremo Taylor has taken a number of legal actions against the Department of Corrections, including challenging the legality of the prison smoking ban and inmates' voting rights.