A fresh inquiry into our electronic surveillance service is being launched with the intelligence watchdog trying to find out if it actually makes good decisions about who to spy on - and how it stays politically neutral.

Inspector General of Intelligence and Security Cheryl Gwyn linked the inquiry to claims the GCSB spied on foreign diplomats competing against Trade Minister Tim Groser for the job of director-general of the World Trade Organisation.

However, she said it was unlikely she was going to be able to probe the allegations.

Instead, she said the inquiry would study the way the GCSB chose its targets, what its decision-making process was and how it stuck to its duty to be neutral in cases where there might be political advantage.

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The Groser claims were among a string of stories broken by the Herald in a collaborative reporting project with investigative journalist Nicky Hager and The Intercept, the US news site with access to the trove of secret documents obtained by intelligence whistleblower Edward Snowden.

It is the second inquiry to be launched after stories in the Herald which were based on top secret GCSB and National Security Agency documents. The first inquiry launched by Ms Gwyn was on New Zealand spying in the Pacific and claims of "full take" collection.

Ms Gwyn said the inquiry was not one taken because of a complaint but one instigated by her own office.

"I consider the issues raised about the process followed when the GCSB considers undertaking particular intelligence activity are of sufficient public importance to warrant an own motion inquiry.

"While it is unlikely that I will be able to publicly confirm or deny the specific allegations relating to this process, I can inquire more generally into how the GCSB determines, within its statutory constraints, what intelligence activity to undertake and what policies and procedures are in place to regulate its activities."

Ms Gwyn said the inquiry would study how the GCSB worked out whether a proposed spying job fit with its legal role and New Zealand's needs. It would also look at the GCSB analysis of benefits and risks and how it handled situations in which their could be perceptions of political advantage.

She said it would also consider how the GCSB kept its minister properly informed in situation where there was a "potentially contested assessment" of the justification for carrying out the spying.

The Herald reported that the GCSB had set up search filters to extract online references to those competing from other countries bidding for the WTO job. There was criticism voiced in the wake of the story over how it served New Zealand's interests as the WTO job is meant to be administrative and neutral.

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The government had - in other areas - thrown considerable support behind Mr Groser's bid for the job.