An immigration bungle in which a computer gifted an extra 120 people a place on a visa scheme has raised doubts about the Government's $80 million online visa programme.

Documents provided under the Official Information Act show demand for the Silver Fern job search visa this year was so high that the system jammed, allowing 420 potential migrants to grab a place, despite the visa being capped at 300 people.

And the privacy of at least nine people was breached during the hectic online application process, about which Immigration New Zealand fielded dozens of complaints.

In a report to Minister of Immigration Michael Woodhouse on May 2, the Ministry of Business, Innovation and Employment said it was investigating where the online system failed, why privacy breaches occurred, and why more than 300 people received places.

The Silver Fern job search visa was introduced in 2010 to entice young, skilled migrants to New Zealand. They can stay nine months, after which they can apply for other skilled migrant visas.

Applications are done online, with extra information required before visas are granted, such as evidence of qualifications and English language ability.

Nearly 3000 people applied for the "extremely popular" scheme when it opened on April 29, with all places - and more - snapped up within 10 minutes.

Immigration received 33 complaints about freezing and payment issues, and several about privacy breaches where some applicants were able to view the user names of others.

"These issues appear to be due to overloading which results from the increased demand for places and the system's inability to manage that demand," the report said.

The over-placement was a "manageable" issue, as Immigration officers expected to decline final visa approval for 25 per cent of those placed. However, the report also revealed technical hitches on an even greater scale in 2012. Then, more than 1500 people applied for the scheme and 606 places were accidentally given.

Of those, 445 got final visa approval - exceeding the quota by 145 people.

Immigration thought problems had been fixed, but "the current issues have highlighted further work is required", the report said.

The Government is pushing through an $80m work programme, Immigration Online, that aims to have 70 per cent of applications managed online by 2017.

Labour's immigration spokeswoman Darien Fenton questioned the ability to get it right. "I should say this would be a warning shot across their bows, on the difficulties with online applications. Immigration is a complex process, and this demonstrates the risk there is with the approach they're taking."

Mr Woodhouse said he had directed Immigration to review its processes and ensure a different system was in place for 2014.

He was also considering an increase in the number of places, and changing the way applicants were chosen from a "first-in, first-served basis" to a more targeted approach.

The technical issues around Silver Fern visas had occurred on the existing, ageing IT system, he said. Immigration Online, set for rollout from 2014, was expected to improve performance.

Immigration New Zealand acting general manager Steve Cantlon said privacy breaches were regretted. The Privacy Commissioner had been informed and complainants apologised to.

Immigration had now approved 255 Silver Fern visas, declined 157, and was still deciding on eight, so the quota of 300 visas would not be exceeded.

At present, the only visa that can be applied for online is the Working Holiday Scheme visa, which has a quota of 50,000 each year.