Immigration authorities have moved to cancel the visa of American expatriate book seller Jim Peron.

New Zealand First leader Winston Peters in March used parliamentary privilege to accuse Mr Peron, an American who came to New Zealand via South Africa, of being a pedophile.

It is understood Mr Peron, who runs an Auckland bookstore, holds a three-year temporary business visa which expires in December.

Mr Peters told Parliament that in the 1980s Mr Peron was the editor and a contributor to San Francisco magazine Unbound -- which advocated sexual relations between adult men and young boys.

Mr Peters passed a copy of the publication to the Chief Censor who in May classified it as objectionable.

Today Labour Department deputy secretary in charge of immigration Mary Anne Thompson said the department had moved to cancel Mr Peron's business visa.

The move follows Immigration Minister Paul Swain asking the department to look into Mr Peron's visa after the initial allegations against him and then again after the Chief Censor's classification of Unbound.

Ms Thompson said following an investigation, the department had commenced a cancellation process on Mr Peron's visa on the basis of character requirements.

A letter was sent to Mr Peron's bookshop in Auckland on June 28 informing him the cancellation process had commenced.

A Labour Department spokesman told NZPA the cancellation process could take some time.

Mr Peron, who is understood to be out of the country, had an initial right of reply.

He said when Mr Peron was initially granted a business visa the department had no knowledge of Unbound or Mr Peron's involvement in it.

In May the Chief Censor's certificate of classification said Unbound put forward a view of paedophilic relations "being loving, legitimate and desirable to both men and boys", while evading any discussion of why such relationships were exploitative and abusive.

"The magazine therefore promotes and supports the exploitation of children and young persons for sexual purposes," it said.

Mr Peters said at the time the classification showed that the publication would have been illegal in New Zealand and its publishers potentially prosecuted.

The NZ First leader said today the Immigration Service decision vindicated his actions.

"Alarm bells should have started ringing at the Immigration Service as soon as (Act party leader) Rodney Hide retreated from his Pro-Peron stance and refused to endorse him after fervently defending his friend at the outset," Mr Peters said.

"I deserve an apology from Mr Hide, (Progressive party MP) Matt Robson and other Peron supporters for the way I was treated over this case, but I will not be holding my breath."