Prof Patman said the Government was weakening the principles which were the key to a democratic system.
"Those principles play a key role in legitimising and distinguishing democratic rule from the activities of terrorist groups such as al-Qaeda, which are dedicated to destroying, precisely those values."
The threat to the country's security was apparently "relatively minor", Prof Patman said.
"You can't have major laws to deal with the odd person in New Zealand who represents a potential threat."
There needed to be a "delicate balance" between maintaining democratic freedoms and being vigilant against terror threats, he said.
In the radio interview Mr Key said in the "real world" the power to spy on civilians was necessary.
"In New Zealand there are people who've been trained for al-Qaeda camps who operate out of New Zealand, who are in contact with people overseas, who have gone off to Yemen and other countries to train.
"I'm sorry, but that's the real world."
Speaking to the Rotorua Daily Post while on a visit to the city today, Mr Key said most New Zealanders would accept there were small numbers of people with links to the organisation living in this country.
"People have trained in New Zealand and gone off to those camps and that's just the way things are.
"We live in a global environment where there are real threats.
"While it's very narrow and very small in number the facts of life are New Zealand is not immune from those potential risks.''
Mr Key would not reveal how many people were involved, or give their names, but said some of them could be New Zealand citizens and they were already being monitored.
"There are small numbers of radicalised New Zealanders who have either gone over to those environments or returned and I don't think this is terribly new. Some are off-shore and some are in New Zealand.''
Mr Key said those being monitored had not necessarily broken the law.
"The fact some of them might have a link might be the sort of reason why the Government raises a warrant to observe their behaviour.''
Mr Key said he had signed warrants to observe people from New Zealand who were currently in Yemen and that he knew who they were.
"There are very specific and unique examples where we know that there is a threat or a potential threat and we have to take those responsibilities seriously.
"We take the appropriate steps for anyone that the Government genuinely believes presents a risk and that's why we have the SIS and the GCSB.''
Otago University deputy director for Peace and Conflict Studies Professor Richard Jackson said he felt Mr Key's claims of people working with al-Qaeda were "exaggerated".
"There might have been one person who did it, or there might have been two or three - but if he's making out that al-Qaeda has some major connection to New Zealand, I'm highly doubtful.
"I'd like to see the evidence."
Prof Jackson also said there was no evidence that mass surveillance of the type being put forward in the GCSB bill would stop terrorism.
"Most terrorist attacks are stopped by community policing and by directed intelligence operations."
Head of Islamic Studies at Auckland University, Dr Zain Ali, said if what Mr Key said was true, it was "deeply, deeply worrying".
"The question I have is if these operatives have been detained or whether they're walking the streets?"
If the people Mr Key was talking about had not been detained, they could be recruiting more operatives for the purpose of planning something, he said.
"And the second risk is related to the Muslim community; that these guys are still out there and walking around. It puts a cloud of suspicion over the community."
Labour leader David Shearer would not confirm whether he had been briefed about an al-Qaeda presence in New Zealand, but said Mr Key was simply politicking to try to give the impression that the controversial GCSB bill was required.
"I think it's yet another one of those episodes when John Key is in a hole, he brings out the weapons of mass distraction. Bringing up threats to national security like this - it's not the type of thing you'd usually expect the Prime Minister to raise on breakfast radio.''
He said New Zealand's intelligence agencies were already monitoring any such risks, regardless of the bill, which was to be debated by Parliament again this afternoon.
"I can't really see his point. Like he has done with weapons of mass distraction, the Boston Bombings, this, all of this is supposed to give the inference that somehow we are unprotected unless he passes his legislation. I think that is very misleading and politicking over an area we shouldn't be politicking over.''
As leader of the Opposition, Mr Shearer is briefed on security matters but the talks are in confidence and he said he would not breach that.
"Of course we have security threats to New Zealand, like there are in almost every country. But we also already have security agencies equipped to deal with it, and they are dealing with it.''
Labour has called for a full review of the intelligence agencies and the way they work together before any law changes are made.
Two years ago, it came to light there was a New Zealander accused of links to al-Qaeda and who was once was arrested trying to enter an al-Qaeda stronghold in Pakistan.
Mark Taylor's name was among 23 Australians or Australia-based people of security interest in a Wikileaks cable, dated January 21, 2010.
It was sent to embassies worldwide to alert them of the people who ``either an historical or current association with Yemeni cleric Anwar al-Aulaqi, or are based in Yemen or the surrounding region and may come into contact with al-Aulaqi''.
Mr Taylor denied any link to the terror organisation and said the whole episode was a misunderstanding.
He was reported to have told the soldiers who detained him that he was going to South Waziristan to get married.
