Asian gangs are exploiting changes in prostitution laws to run lucrative illegal brothels, United Future MP Gordon Copeland says.

Mr Copeland is part of a three member working group looking into problems with the Prostitution Reform Act.

United Future brokered a review of parts of the Act in its support agreement with Labour.

Mr Copeland said one of the biggest problems identified by the group in a visit to Auckland this week was relatively large brothels operating out of houses in plush residential suburbs.

The brothels, in Waitakere and on the North Shore - often set among "palatial housing" - mainly employed Chinese prostitutes and were run by Chinese gangs.

Mr Copeland said North Shore council authorities had told the group of one illegal unlicensed brothel that had nine prostitutes and grossed over $600,000 a year.

Under the Prostitution Reform Act up to four self-employed "owner operator" prostitutes can operate from a residential residence without requiring a brothel licence.

Such prostitutes should not have a boss or pimp. Other residential brothels can operate in set areas if they are licensed.

But Mr Copeland said detection was difficult.

Police and council staff had limited powers to enter houses and even if they did so would have to catch an employer on site, or find too many workers present at any one time, in order to prosecute.

"How do you go into a suburban house. You are told there's a huge number of men going in there all day every day, going in and out, so there's evidence there's a brothel there, but they've got no legal right to knock on the door and say we want to come in there."

Mr Copeland said it appeared that suburban settings were good for business.

"They want it in a residential area, because the clients feel like they won't be caught in the act, parking their cars.

"That's why I think the upmarket suburbs come into play because there are not a lot of people there during the day and the activity is taking place during the day.

"These are guys going there at morning tea time, lunch time, afternoon tea time."

He believed reducing the number of prostitutes legally allowed in unlicensed residential brothels from four to two could make it easier to detect illegal operations.

A linked solution would be requiring all residential prostitutes to seek some kind of "simple permit" that identified the address they were working from.

Mr Copeland said the group would go to Christchurch at the end of next month to look at problems with street soliciting.

It would then write a report which would go to Justice Minister Mark Burton and feed into a review of the Act.

Under United Future's support agreement with Labour, the Act would be reviewed to look at problems associated with street soliciting, under-age involvement and local authority countrol over brothel zoning.

- NZPA