UPDATED 1.09pm: Cabinet is discussing a bill that changes laws around our spy agencies and gives the GCSB powers to spy on New Zealanders.

A review carried out earlier this year recommended restrictions that stop the GCSB spying on New Zealanders should be scrapped, but says the change shouldn't be made without putting a high-level warrant process in place.

It also recommends the country's two security agencies should be covered by a single Act of parliament.

Under current law the SIS can spy on New Zealanders but the GCSB, which has much more sophisticated eavesdropping equipment, is restricted to gathering foreign intelligence.

John Key is expected to announce details of the law change this afternoon once it's signed off by Cabinet.

Key cited the threat posed by Isis and global terrorism.