Lange papers reveal US spy threats

Private papers revealing the United States had threatened to spy on New Zealand and including a top secret report by New Zealand's electronic spy agency were published today.

Former Prime Minister David Lange's private papers include a top-secret report by the Government Communications Security Bureau that casts new light on the NZ-US intelligence relationship after the anti-nuclear policy and breakdown of Anzus.

Intelligence expert Nicky Hager told the Sunday Star-Times the GCSB report was the most secret and revealing intelligence document to reach the New Zealand public.

The newspaper was given permission by Archives NZ -- after it gained Cabinet approval -- to view the documents, which were kept secret until Mr Lange's death in August.

Among them is a letter from former minister David Caygill, written on March 21, 1986, in which he describes a lunch with United States ambassador Paul Cleveland.

"The ambassador asked me if I realised what was at stake in the dispute between the two countries," Mr Caygill writes.

"I asked him what he meant. He replied trust. I asked him what he meant by that and he said that until now the USA, Canada, UK, Australia and New Zealand had had a unique relationship. 'We have not spied on each other. If you go ahead with your policies we will not be able to trust you'.

"I took the clear implication from his remarks that if our relationship with the US deteriorated further, then the US would no longer feel any inhibition in conducting intelligence gathering operations against us."

In another letter a fortnight later, the newspaper reported Mr Lange's chief of staff, John Henderson, said he also lunched with the ambassador, who raised the same issues "and it was difficult not to reach the same conclusions as Caygill reached".

Also contained in Mr Lange's papers is the 1985-86 annual report of the Government Communications Security Bureau, the government's electronic spying agency, which is marked "top secret" and "umbra" -- the highest security classification given to intelligence documents.

"Internationally, documents like this come to light maybe once a decade and there will be great interest in this from researchers in the US and other countries," Mr Hager told the Star-Times.

"Although it is 20 years old, it gives huge insights into New Zealand's intelligence operations and relationships, particularly with the US in that critical period."

The report shows that while the intelligence flow to New Zealand from the US dropped after the anti-nuclear policy, the GCSB maintained significant links with American intelligence agencies.

GCSB director Colin Hanson describes the relationship as "a mixed state of official cautiousness and private cordiality", and the volume of overseas intelligence reports increased by 33 per cent on the previous year.

The report lists the countries and agencies on which New Zealand was spying. They include targets that have never been officially acknowledged, including UN diplomatic communications, Argentine naval intelligence, Egypt, Japan, the Philippines, Pacific Island nations, France, Vietnam, the Soviets, North Korea, East Germany, Laotia and South Africa.

Mr Hager said it was a severe breach of security that the report had gone astray from the GCSB. Marked number 1 of 16 copies, the report should have gone back to GCSB after Mr Lange finished reading it.

- NZPA