Prime Minister John Key says he doesn't see the need for a further inquiry into the GCSB's spying on Megaupload millionaire Kim Dotcom, and has dismissed suggestions the situation should be handled in the same way as his "Teapot Tapes'' complaint.

The Green Party has asked police to investigate the Government Communications Security Bureau's (GCSB) actions in the lead-up to the arrest of the internet tycoon over his file-sharing website.

Greens co-leader Russel Norman said a report into the incident by Inspector General of Intelligence and Security Paul Neazor clearly concluded that the GCSB's actions were illegal, something Mr Key has also publicly acknowledged.

Speaking to media after addressing a trade forum in Auckland today, Mr Key said the Green Party's suggestion sounded like "a bit of a stunt'' and "they can take it to the police if they want to''.


"At the end of the day there's a serious issue here and we addressed that issue yesterday and I think most New Zealanders would see that I am very unhappy about the way my ministry has performed.

"I expect better and I'll be getting better out of them in the future. But the simple facts of life are that they suffered what can only be described as a massive brain-fade by one person who actually reviewed the file. That's wrong and it shouldn't have happened but people do make mistakes.''

Dr Norman said the GCSB's illegal spying had parallels with the "Teapot Tapes" affair, when Mr Key's conversation with Act's Epsom candidate John Banks in a well publicised meeting at a Newmarket cafe during last year's election campaign was taped by a member of the media.

"Mr Key kicked up an almighty fuss and had police raid media outlets to make sure the tape wasn't released'', said Dr Norman.

"If Prime Minister Key really feels so strongly about a person's right to privacy, then he should back my call for the police to investigate the illegal surveilling of New Zealand residents by a government spy agency.''

The Prime Minister dismissed this: "Yes but in my case there wasn't an independent inquiry by Inspector Neazor and in this case there's been an independent inquiry. We've been quite clear and we've fully released the report.''

Justice Neazor, a former High Court Judge and Solicitor-General, found 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. The GCSB is not allowed to spy on New Zealander 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.


Mr Key said it wasn't a case where the GCSB thought they could get away with illegal activities.

"I've seen their paperwork in terms of the review and they just simply got it wrong. They shouldn't have because it was pretty basic, but they genuinely believed he was not protected (as a New Zealand resident).''