WELLINGTON – New Zealand’s Prime Minister John Key has ordered an inquiry into whether NZ intelligence operatives engaged in unlawful spying before the January arrest of Megaupload owner Kim Dotcom, pictured.
Some communications had been obtained “without statutory authority” by individuals in the Government Communications Security Bureau, the country’s main intelligence agency, Key said.

The latest development appears to ensure there is little chance of New Zealand complying in the short term with the US request for his extradition to face accusations of huge-scale copyright theft.

It follows a finding in June by an NZ court that a search warrant used for a raid on Dotcom’s palatial home was illegal. That court also said that Dotcom should be allowed to see evidence on which his extradition hearing will be based – a request US authorities have refused.

The FBI has accused Dotcom of leading a group responsible for earning more than US$175 million since 2005 by copying and distributing music, films and other copyrighted content without authorisation.Dotcom insists his Web site was merely an online storage facility.

He adds that a new version of Megaupload, called Megabox, is 90 percent complete and should launch before the end of the year.