The Government's admitted people involved in the Kim Dotcom/Megaupload case have been spied on illegally.
The Prime Minister has requested an inquiry by the Inspector-General of Intelligence and Security into the unlawful interception of communications by the Government Communications Security Bureau.
The Crown has filed a memorandum in the High Court in the Megaupload case, advising the Court the GCSB acted unlawfully when helping police to locate certain individuals involved in the case.
John Key says he's disappointed unlawful acts took place, and that he expects our intelligence agencies to always operate within the law.
He says the GCSB recorded communications without the correct authority.
Green Party co-leader Russel Norman says it appears our spy agencies are dancing to the tune of the US Government.
And he says the Prime Minister has questions to answer.
"Did the GCSB discuss with him at any point, Kim Dotcom or the Megaupload case, because he is the minister responsible for the GCSB which has now been found to be acting unlawfully."
Our political editor Barry Soper says this is the latest in a series of revelations of botched actions by the authorities over the raid.
He says the timing of John Key's announcement's interesting, given the raid was made on behalf of the Americans.
Barry Soper says he was clearly not wanting to upset them when their defence secretary was visiting last week, which was when he knew his spy department had carried out illegal acts.
It now begs the question whether the arrests in the raids were also illegal.
In the meantime Barry Soper says Mr Dotcom's laughing all the way to his next court appearance.
Photo: NZ Herald