Key hits back at spy-law claim

John Key has struck directly at a specific detail in the spying claims, saying new laws passed last year had nothing to do with the alleged mass surveillance project.

The claim is a direct contradiction of one of the key pieces of evidence journalist Glenn Greenwald used to assert his claim of mass surveillance.

A document from the Snowden archive stated linked last year's new spying laws to the cable-tapping plan. It read: "GCSB's cable access program Speargun Phase 1; awaiting new GCSB Act expected July 2013; first metadata probe mid 2013."

Questions from the Herald saw a spokeswoman for the Prime Minister saying the new GCSB law passed last year had nothing to do with "Initiative 7418", the New Zealand name for Project Speargun.

Watch: Snowden: NSA has Auckland facility

Instead, she claimed it was sparked by "issues" identified with the GCSB's laws in September 2012.

She said it became clear during the review the law needed changing. "Work on that began while the review was still underway and was managed by DPMC. Initiative 7418 didn't have any bearing on the new legislation."

The statement sits awkwardly with last year's review into the GCSB which was completed on the same day a New Zealand intelligence executive was briefing the NSA on progress on writing the new law.

Ms Kitteridge, in her report on March 22 last year, said she had found a law change was needed for the GCSB to operate with clarity. Her recommendation on that date was "legislative reform to be considered".

She also noted current "policy work" by the Department of Prime Minister and Cabinet would lead to a suggested amendment to the law.

The NSA memo dated the same day has Roy Ferguson, director of DPMC's Intelligence Coordination Group, visiting the US spy agency to "provide an update on legislation being proposed for the New Zealand Intelligence Community".

Greenwald said the NSA slide clearly showed the new law and the cable-tapping project were linked. "They flew the highest level of the (Intelligence community) to the NSA in March 2013 specifically to provide an update on this legislation. They were saying this legislation would vest them with whole new powers."

He said the NSA pressured partner countries to change the law to allow greater access to its citizen's information. "That is clearly what happened here. You see the NSA's fingerprints all over this."

It also emerged yesterday the documents which Mr Key said he made public to protect his reputation threatened massive damage to New Zealand's wellbeing if made public without permission, going by the GCSB's own threat estimates.

The four documents were previously marked at the "Secret" level of classification. The GCSB guide to security classifications says the "compromise" of "Secret" information could "damage the security, defence or international relations of New Zealand and/or friendly governments".

Mr Key's office refused to explain the process for making the documents public but said the Prime Minister wasn't concerned about danger arising from their losing "secret" classification.

Inspector-General of Intelligence and Security Cheryl Gwyn issued a statement which said: "As part of my role as Inspector-General, I review whether the GCSB complies with the restrictions upon interception of New Zealanders' communications and with the requirement to intercept communications only for authorised purposes. That review is ongoing.

"I am only able to comment on specific GCSB activities through my annual and inquiry reports. However, I can advise that I have not identified any indiscriminate interception of New Zealanders' data in my work to date. I will continue to monitor these issues."