The spying watchdog has "opened a can of worms" by investigating a potential New Zealand link to the CIA's rendition programme, a security expert says.

Inspector-General of Intelligence and Security (IGIS) Cheryl Gwyn yesterday revealed in her office's annual report that she had opened an inquiry into whether New Zealand's spying agencies had any connection to the CIA programme, which ran from 2001 to 2009.

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Security analyst Paul Buchanan, who runs the 36th-Parallel Assessments consultancy, said there was no reason for the IGIS to begin an inquiry unless she had seen something that led her to believe it was worthwhile.

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"She's opened a can of worms here because there was no reason for her to open this inquiry unless she saw something," Mr Buchanan told Radio New Zealand.

He said New Zealand would not have known about the post-9/11 rendition programme through the Five Eyes spying network, because that dealt primarily in electronic surveillance. The CIA regime focused on the use of black sites and "extraordinary rendition".

But it would not be "entirely surprising" if the Security Intelligence Service (SIS) knew about the rendition programme at the time, given it was partnered with the CIA and had a liaison officer based at its headquarters in Langley, Virginia.

New Zealand also had troops based in Afghanistan, where some of the black sites were situated.

Mr Buchanan said it was important to separate knowledge of the CIA rendition programme and participation in it.

If the SIS knew about it did not inform ministers at the time, then "heads could roll" at the agency. This would be the "lesser sin", he said.

If the SIS took part in the programme, by offering up targets for rendition or by hosting a black site in New Zealand, it would be a "very, very heavy indictment".

"Because frankly, the extra rendition programme, by all accounts, was illegal," Mr Buchanan said.

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Ms Gwyn warned that her initiation of the inquiry "does not suggest or presuppose" any New Zealand involvement in the Central Intelligence Agency's brutal rendition activities between 2001 and 2009.

But she said in her annual report that it was in the public interest to investigate whether New Zealand spies knew of, or were connected to, the CIA's interrogation and detention programme, which was detailed in a harrowing report in December.

The US Senate Committee report identified countries which were involved in the programme, but these details were redacted.

The inquiry would clarify any possible Security Intelligence Service (SIS) or Government Communications and Security Bureau (GCSB) involvement and also any future risk of getting involved in similar activities.

The minister responsible for New Zealand's spying agencies, Chris Finlayson, would not say whether he had been advised of any connection between the agencies and the CIA regime.

Ms Gwyn also confirmed a separate inquiry, on how the GCSB decided what foreign intelligence to undertake, would be released soon. It was prompted by allegations the GCSB spied on Trade Minister Tim Groser's rivals for the top World Trade Organisation job