State agencies will gain fresh powers to snoop and search under a sweeping law change - though many of us don't recognise how closely we're watched already. The impact may be to make us more aware of our rights.

Most of us like to think we live our lives relatively free from the prying eyes of the state: that if our house is broken into while we're at work or the beach it's a burglar rifling through the knickers drawer rather than a cop.

Law changes covering police and other agencies' powers to snoop and search threaten to scare us out of our complacency.

Five years in the making, the Search and Surveillance Bill has provided fertile ground for conspiracy theorists from its infancy - which was hard on the heels of tougher terrorism laws. Touted as an attempt to drag search and surveillance powers into the high tech era, it inevitably inspired a Big Brother response - one major law firm railing against "secret cameras in the ceiling, tracking devices under the car and bugs in phones" as if none of these were allowable at the moment.

Now that the bill - after two revisions - has been reported back to Parliament, many who summoned the ghost of George Orwell are appeased. Clauses extending search and seizure powers to councils have been erased; power to search homes for dishonestly obtained (but not stolen) goods is removed and the power to enter premises while in hot pursuit is restricted to more serious offences.

That doesn't mean we can all go back to sleep. All power corrupts, more or less, and what this law change inarguably does is increase the opportunities for abuses by police and other agencies - simply by increasing the scope of their powers.

Search powers without a warrant for suspected drug offences are expanded, making it more likely that innocent parties in vehicles, homes or on the street will be rubbed down (in situations where police believe it "not practicable" to obtain a warrant).

For highly serious offending, there is new scope to search without a warrant for evidence which officers fear could be destroyed before a warrant is obtained.

Yet in some areas, argues the Law Commission which drafted the bill, it restricts the circumstances in which agencies' can use existing powers.

Major changes which continue to vex civil libertarians and interest groups include:

* New powers for Police, Customs and Internal Affairs officers to carry out visual surveillance (use of hidden cameras, telescopes and binoculars) in homes and workplaces, sometimes without a warrant.

* Powers to remote-search computer networks, web-based email accounts such as gmail and Facebook.

* Police powers to use examination orders - forcing people to answer questions about information they hold - and production orders requiring people to hand over documents.

News media organisations fear examination orders could force them to betray sources on stories of public interest, threatening the supply of confidential or "whistleblower" information. Journalists could find themselves in a Catch 22 situation - having to reveal all that they know in order to convince a judge it should remain privileged.

Civil libertarians query the extension of provisions to a broad spectrum of regulatory agencies, covering activities as diverse as farming, boxing, human reproductive technology, fisheries, prostitution and car sales. Agencies with existing search powers gain the ability to "use force against property" to carry out inspections.

Internet group Tech Liberty says forensic software makes it almost impossible to restrict computer searches to specific keywords and officials will see a vast range of irrelevant private information.

"If you are accused of fraud and police search your property they might take every paper which seems to have some financial information on it but they wouldn't take your medical records or your family photo album," says co-founder Thomas Beagle. "If they take your laptop or PC which your entire family uses you've got all your personal records and your family's records and your family photos on it and maybe you and your wife's more personal photos ..."

Beagle says the core problem with the bill is its premise that enforcement agencies need more help to search and watch.

"Obviously there are times when it's necessary to do so for the maintenance of law. But they haven't asked: 'what do the police actually need to do their job while still protecting people's privacy and freedom?'."

Does it edge us closer to a police state? In theory yes, simply by increasing the powers available to the police and many regulatory agencies. But much will depend on how officers interpret these powers and how judges balance the case for coercive powers against individual freedom and privacy rights.

Auckland Council for Civil Liberties chairman Barry Wilson says people will need a lawyer's knowledge of their rights and may be less likely to co-operate with authorities without legal advice. He predicts a goldmine for lawyers as regulators' actions are challenged.

"Having these powers encapsulated in one statute rather than being spread over a range of statutes will focus attention on the extent of powers and their incredible complexity," says Wilson. People will have no idea whether powers are being exercised legally and are likely to be more resistant.

"Experience suggests powers are likely to be exercised in a rough and ready fashion and if they are pushed hard, Ruatoki-style, there will be a groundswell of public opposition."

Law Commission deputy president Warren Young says the bill imposes as many restrictions as extensions of enforcement agencies' powers.

What happens next

The bill has been reported back to Parliament and awaits its second reading.

The Media Freedom Committee, representing major print, TV, radio and internet news outlets, is urging the Government to exempt news organisations from examination and production orders.

It says police search powers are already sufficient.

Labour and the Greens will continue to push for amendments in Parliament, including to the examination and production order provisions.

The Greens continue to oppose the use of covert cameras in the home.

The new powers of the Search and Surveillance Bill - what it will and will not allow

Current laws allow officers to break in and plant listening devices in your home and to use tracking devices for alleged serious offending, sometimes without a warrant. But visual surveillance (e.g. hidden cameras, binoculars, telescopes) which involves trespass on private property is illegal. The bill gives power to covertly install visual devices.

A warrant will be needed to use visual, audio and tracking devices (except in "some situations of emergency or urgency" for offences punishable by 14 or more years in prison and for no more than 48 hours).

Use of both visual and audio devices will be limited to alleged crimes punishable by seven years or more in prison and firearms offences. This effectively confines visual and audio surveillance to the Police, Customs and Internal Affairs (pornography cases).

Observation without a warrant of private premises using a visual device (e.g. from a place across the road) is restricted to three hours in any 24-hr period and eight hours in total. Officers can currently use surveillance devices without time limits or a warrant if they are not trespassing on private property.

The Law Commission's Warren Young says the bill regulates visual surveillance not involving trespass for the first time. "At the moment [officers] can train a video camera on your bedroom from a house across the road and play it 24 hours a day for three months - it's completely unregulated."

Civil libertarians say many loopholes will allow officers to undertake trespass surveillance and carry out "fishing expeditions".

Warrantless powers

Officers gain power to enter premises or search a person or vehicle to prevent loss of evidence. At the moment, warrantless searches are confined to firearms and drugs offences.

Limits: Cases punishable by 14 years or more in prison.

Examination orders

Powers available to the Serious Fraud Office are extended to the police. Orders require people to answer questions about information they hold.

Limits: Serious fraud punishable by 7 years or more in prison; business crime punishable by 5 years or more in prison; offences by organised crime. Issued only by a judge. Individuals can refuse on grounds information is privileged and this can be put to a judge.

Concerns: Erodes the right to silence. Media sources could dry up, suppressing public interest stories. Fears those holding incriminating information could be at risk. Confidential information may have to be revealed to satisfy a judge it should remain privileged.

Warren Young says the bill protects journalistic privilege at the point of search for the first time.

Production orders

Require people to hand over documents in their possession.

Limits: Penalties of 5 or 7 years jail.

Critics including the Auckland Council for Civil Liberties and the Society of Authors say the threshold for production orders is too low. Agencies need only "reasonable grounds to suspect that an offence has been committed".

Young says orders can only be used to obtain documents police could otherwise seize using a search warrant. They are intended to assist people who may wish to cooperate and to prevent the intrusiveness of a raid. Non-police agencies will only be able to use them if they have search warrant powers.

Computer searches

Officers have current powers to search computers if they have reasonable grounds to suspect evidence is held.

New powers include:

* Ability to remote search computer networks without notification.

* Ability to search sites with no physical address (eg: web-based email, Facebook).

* Requiring those with knowledge of computer systems to provide access.

* Able to hold hard drives for up to six months (or longer with judicial approval).

Concerns: Agencies will be able to conduct fishing expeditions, however narrow the search terms under the warrant. Agencies will share information about minor offending.

Young says people will be notified if their computer or email or similar internet-based site has been subjected to a search.

He says fishing expeditions under current and proposed law are unlawful but concedes people may be unable to tell if there has been a broad search. "The same can happen with physical searches but it is subject to retrospective scrutiny. No other tenable safeguards have been identified."

Plain view seizure

Currently and in the bill, officers are able to seize incriminating items they see "in plain view" while executing a search warrant. There's concern about extending this to computer searches, in which forensic software trawls myriad files and indexes information. The ACCL says it's like having a general warrant, breaching an age-old common law principle. It wants a clear statement of what plain view means.

Young: "As with physical searches, any information seized will have to be found while officers are doing something that is lawfully part of the search. It will be illegal to enter keywords to look for something that's unrelated to the search."

Issuing officers

The ability for agencies to obtain some search warrants from JPs and court registrars and deputy registrars raises concerns about training, technical expertise and possible bias.

Young says there is past concern about warrants being issued without proper scrutiny or which are defective in form. But it is impossible to expect judges alone to provide 24/7 warrant access. A limited number of JPs and registrars will receive more rigorous training. Surveillance warrants and examination orders may only be issued by a judge.

Read the Search and Surveillance Bill here.