The Security Intelligence Service may be expanded despite three years of growth already.
The revelation comes in the service's annual report, which also says there are people in New Zealand who have links to terrorism.
The report for the year to June reveals former State Services Commissioner Michael Wintringham started a review in June to see if the SIS had the capacity to meet the increased demands being placed upon it.
And Director of Security Richard Woods said in the report that SIS investigations showed there were individuals in or from New Zealand who "support Islamic extremist causes".
"The service views these developments, most of which have come to attention within 2003-04, with considerable concern.
"They indicate attempts to use New Zealand as a safe haven from which activities of security concern elsewhere can be facilitated and/or the involvement of people from New Zealand in such activities."
The comments are similar to those he made to reporters in March when he said the SIS continued to identify people in or from New Zealand who were "of terrorist or other security concern".
The annual report said issues investigated during the year included apparent links between people in or from New Zealand and international terrorist activities, people in New Zealand seeking to raise funds for terrorist organisations, and domestic links to overseas programmes developing weapons of mass destruction.
The Minister in Charge of the SIS, Prime Minister Helen Clark, said yesterday she was did not want New Zealand to be used as a safe haven.
"We live in a country which is one of the least likely in the world to be a terrorist target, but of course we have places like embassies, international businesses, people who could be targets.
"So we need to keep on top of issues of security concern locally and the last thing we want is for New Zealand to be known as a soft touch."
Mr Woods said in the report said that after the SIS's expansion over the past three years the Government had agreed to a joint recommendation from Treasury, the service and the Department of Prime Minister and Cabinet that a "baseline" review be done.
It would look at whether the service had the capacity to meet the demands on it.
SIS concerns
* Apparent links between people in or from New Zealand and international terrorist activities.
* People seeking to raise money for terrorist organisations.
* Domestic links to overseas development programmes for weapons of mass destruction.
* Foreign intelligence organisations conducting covert activity in New Zealand.
* Information from a foreign national in New Zealand relating to the security of another country.
Source: SIS annual report
Terror concerns may lead to bigger SIS
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