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The Law Commission will be given a wide brief when it reviews the Terrorism Suppression Act and will be able to consider changes to other legislation which could give police increased powers.
Last week Solicitor-General David Collins rejected a police application to prosecute people - arrested last month during police raids over alleged training camps in Bay of Plenty - under the Act.
He said there was insufficient evidence to meet the high bar set by the law, which was focused on international not domestic terrorism and was overly complex.
He recommended the Act be reviewed by the Law Commission and Prime Minister Helen Clark said this afternoon terms of reference were being drafted.
She suggested other laws could be amended rather than a law targeting domestic terrorism be drafted.
"The fact the solicitor general has found that it does not apply to this particular case need not necessarily provoke a response that we need a strong law on domestic terrorism," she told reporters.
Miss Clark said the fact police could not use intercept evidence for prosecutions under the Arms Act was a factor behind using warrants for arrest under the Terrorism Suppression Act.
"That raises the question in everyone's mind as to whether had they (police) had the power to use the interception evidence under the Arms Act whether they would have pursued the other course," she said.
Miss Clark said police had believed the group it was monitoring was worth prosecuting but it was found its alleged activities did not meet the threshold under the Act nor under conspiracy provisions of the Crimes Act.
"A possible course to consider is whether there should be a greater list of offences under the Arms Act where prosecutions mounted for those offences would be able to draw on intercept evidence."
Miss Clark said the case raised "profound" legal issues.
"I think we need to look at a range of options which could involve consideration as to whether the conspiracy law that we have is far reaching enough whether the ability to use interception evidence should be extended.
"The government has an open mind about all of that at this point."
Miss Clark said the Law Commission would not do anything to cut across live court cases.
She did not know if it would get access to the evidence the police gathered in its review.
On Friday Auckland University law faculty Associate Professor Scott Optican called for an independent inquiry rather than the Law Commission review.
He said the inquiry needed to consider the police evidence.
Prof Optican also said the inquiry should look at the police actions in the raids but Miss Clark said today that was not being considered.
New Zealand First leader Winston Peters, who is sponsor of the Terrorism Suppression Amendment Bill set to pass into law tomorrow night, on Friday said Parliament had "stuffed up" with the 2002 Act.
Miss Clark said all of Parliament had been responsible for it.
It had begun as a bill to ratify international terrorism conventions but after the September 11, 2001, terrorism attacks in the United States had been changed.
Miss Clark said the amendment bill needed to go through or New Zealand would fail to meet international legal obligations.
- NZPA
