The Government has stopped a review of New Zealand's controversial terrorism laws, a move being greeted with suspicion by critics.

The Law Commission has been attempting a reform of our anti-terrorism laws since they were found to be unusable in the wake of the Urewera "terror" raids.

But Justice Minister Judith Collins has shut down the review of the Terrorism Suppression Act, the second time the Government has stalled attempts to reform it.

Green party co-leader Russel Norman said the move raises suspicions that the Government is unwilling to risk further public scrutiny of the state's search and surveillance powers, at a time when it is already under fire over the GCSB Amendment Bill.

The bill, which widens the powers of the government spy agency, was opposed in protest marches across the country and by prominent New Zealanders. The law change came after revelations of illegal spying on German internet entrepreneur Kim Dotcom, and 84 other New Zealanders.

"They got burnt over the GCSB. They don't want anyone looking at these issues again and raising them," said Norman.

Yet Norman said now was a good time to reconsider New Zealand's anti-terrorism legislation, not just in light of the "debacle" of the Dotcom case, but because the world had changed since 2002, when the Labour government passed the Terrorism Suppression Act in response to the 9/11 terror attacks on the US.

"It seems ridiculous that we're not reviewing it," said Norman.

Collins said she halted the review because it was no longer needed and there were more urgent matters to deal with.

"The initial concerns arising from the Urewera case have been addressed by the passage of the Search and Surveillance Act 2011, and there does not appear to be any substantial or urgent concerns arising from the operation of the Act.

"There are other matters of a higher priority that are included on the Law Commission's work programme for 2013/2014."

The Terrorism Suppression Act came under withering attack in 2007, after police relied on the Act to spy on, and then arrest, Tame Iti and other activists who it alleged were training to use Molotov cocktails and semi-automatic weapons in military-style camps in the Ureweras. A month after the controversial raids, then-Solicitor General David Collins QC said the Act was "unnecessarily complex" and "incoherent", and in fact hadn't provided legal grounds for the police to lay charges. Most of the charges against 17 people arrested were then dropped.

As a result, the Law Commission was asked in 2008 to review the Act (along with the Crimes Act and the Arms Act). The review was put on hold until remaining court action against Urewera defendants was complete, but in early 2012 it was reported that the review had been dropped from the commission's work programme by former Justice Minister Simon Power. At that time, his successor Judith Collins told the media there were no plans to review the Act.

Curiously, though, according to the Law Commission's "Statement of Intent 2013-2016" released in May, it was once again working on an "issues paper" about "Criminal Offences in the Terrorism Suppression Act". Then in July, Collins pulled the plug, without giving the commission any reason.

Law Commission general manager Roland Daysh said: "The last correspondence on our work programme with the minister was late July, and in that correspondence it [review of the Terrorism Suppression Act] was clearly not on our work programme".

Daysh said sometimes when the Justice Minister removed a project from the work programme the commission would receive an explanation, but "in this case we didn't".

He said: "When you think of the full range of legal issues that need to be addressed, we're a small agency so we work on the highest priority, and the Government has signalled this is not a high priority".

The Terrorism Suppression Act was passed in 2002 by the Labour government. It brought New Zealand into line with number of international conventions on terrorism, and had less focus on domestic terrorism. It carried a maximum sentence of 14 years for anyone convicted of planning or preparing to commit a terrorist act. The Law Commission is an independent Crown Entity funded by government. It makes recommendations to parliament on laws that need updating, reforming or developing. According to its website, it currently has 14 projects at different stages of completion, including reviews of contempt of court and media reporting of suicide.