PM 'appalled' by GCSB's failure and apologises to Dotcom.
Kim Dotcom has accepted Prime Minister John Key's apology for the GCSB's unlawful spying but has added his voice to calls for an independent inquiry into the fiasco.
That call came during a snap debate in Parliament held after the release of a report into the affair which the Opposition labelled a "whitewash" as it laid much of the blame on police rather than the minister responsible, Mr Key himself.
Mr Key offered the apology to Mr Dotcom and the public following Inspector-General of Intelligence and Security Paul Neazor's report on the Government Communications Security Bureau's illegal spying.
He was "appalled" at the agency, saying it had "failed at the most basic of hurdles" by not properly checking it was entitled to spy on Mr Dotcom.
"Of course I apologise to Mr Dotcom, and I apologise to New Zealanders."
Mr Dotcom, who rarely talks directly to the media, took to Twitter saying: "I accept your apology.
"Show your sincerity by supporting a full, transparent & independent inquiry into the entire Mega case."
One of Mr Dotcom's legal team, Greg Towers, was unwilling to say whether there was any possibility Mr Dotcom would sue over the illegal spying which took place between December 16 and the January 20 raid.
"There may be, there may not be but that's not really the point at the moment ... the fact that the Prime Minister has come out and given an apology means a lot."
But Mr Key's apology was not enough for opposition parties, which were unanimous in calling for a more detailed independent inquiry into the matter.
Labour leader David Shearer said Justice Neazor's report was "a whitewash because it ignores the complete failure of democratic oversight by Prime Minister John Key".
Former High Court Judge and Solicitor-General Justice Neazor said the GCSB had acted unlawfully because it relied on incorrect information from the police that Mr Dotcom and his associate Bram van der Kolk were not full permanent residents.
He said the error stemmed from changes to immigration and GCSB legislation which took effect within days of Mr Dotcom entering New Zealand in November 2010.
The police and GCSB failed to realise Mr Dotcom and Mr van der Kolk were full permanent residents until earlier this month, despite the fact that - as confirmed by an Immigration New Zealand spokeswoman yesterday - police were provided with a copy of Mr Dotcom's immigration file, including his residence status, on December 22 last year.
The GCSB will now review past cases back to 2009 to ensure it made no similar errors.
But leaving aside the "confusion" over Mr Dotcom's residency status, Justice Neazor said the request from police for GCSB help was "proper" as was the bureau's action in monitoring Mr Dotcom and his associates.
But Mr Key was far more critical of the GCSB, saying the bureau had let itself down very badly. Nevertheless, it was a matter of "mistake andhuman error, not one of a great conspiracy".
Mr Key said none of the information collected by the bureau had been forwarded to US authorities, as feared by Mr Dotcom, and the information would not be admissible in court as it was illegally obtained.
- additional reporting Claire Trevett