Sunday Star-Times editor Cate Brett accepts the newspaper could have better handled allegations that the Security Intelligence Service (SIS) spied on Maori organisations.
An inquiry by Justice Paul Neazor concluded the claims were "a work of fiction" by those who supplied the newspaper with information.
The Star-Times published its reports last November, basing the story on evidence from "dissident spies" who were not identified. The reports were also published on the Stuff news website, which is owned by Star-Times publisher Fairfax.
Brett said yesterday that the story was published in good faith and after a thorough investigation into a "sophisticated and complex web of evidence".
She accepted that Justice Neazor - the Intelligence and Security Inspector-General - had found no evidence to support the allegations of unlawful bugging of iwi groups.
The failure of the story's sources to provide Justice Neazor with documentary evidence "led him to conclude that this evidence did not in fact exist", said Brett.
That had highlighted the difficulties in providing independent corroboration for claims involving the intelligence community, she said.
But "with hindsight, readers would have been better served by a less judgmental treatment of the initial news story".
Brett's spokesman told NZPA that the newspaper should have been less emphatic that the allegations were correct.
Prime Minister Helen Clark criticised the newspaper when she released the Neazor report.
"They were hoaxed by conmen, and there was nothing for the conmen to hang the story on," she said.
The claims were "a work of fiction" by those who supplied the newspaper with information.
The Prime Minister authorised the inquiry after receiving a complaint from Maori Party co-leader Tariana Turia.
Brett said the Sunday Star-Times would publish the Inspector-General's report on its website and report further to its readers on the matter "in due course".
Nicky Hager, an investigative journalist involved in the story, said yesterday that he was under strict instructions not to comment on the matter.
Political website Scoop was also named in the Neazor report.
- NZPA
Editor backs off spying 'scoop'
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