The threat posed by people on New Zealand's terror watchlist has increased this year, Prime Minister John Key says.

Photo: RNZ / Alexander Robertson

About 40 people suspected of raising money for Islamic State (IS) or trying to go to Syria to fight are on the watchlist.

Mr Key revealed today a small number were considered more dangerous than others and were being monitored both physically and electronically, 24 hours a day.

He said a "small group" was under the 24-hour surveillance, but he would not reveal the specific number.

"We're constantly reviewing the list because [if] we say there are 30 or 40, [it] doesn't mean there have to be 30 or 40 - if there are more, there are more.

"It's a very intensive process, once you start having 24-hour surveillance on people, but we can't abdicate our responsibilities. I mean, if we think there's a serious risk then we have to monitor that and we have to do something about it."

He said the government would still have to have legal authority to carry out surveillance on family members or associates.

"So, you know, warrants are generated. We don't live in a police state, so to be monitored your actions would have to support the creation of that warrant."

Photo: SUPPLIED

While authorities were aware some people in New Zealand were actively raising money to support IS, Mr Key said it was not always straightforward to secure a conviction.

He said activity supporting terrorist activities, including fund-raising, was an offence under the Terrorism Suppression Act.

He had asked his officials why no further action had been taken, if authorities knew it was taking place.

"It stands to reason we do everything we can and if we can take a successful prosecution, we will.

"And that's one of the questions I always ask my officials - how rapidly can we effectively get these people behind bars if there's a serious case?"

He said the main issue was people could go to court and make a case the authorities had somehow misinterpreted what they were doing.

"The authorities will act but they'll only act at a time when they're absolutely sure they can get a successful prosecution, because a lot of these people obviously aren't aware that they're being monitored.

"If we do ultimately bring that to their attention, then who knows where that really goes?"

'It's the ones that we don't know about'

Earlier, he told Morning Report his own concerns were never about the people under surveillance because they were being watched right around the clock.

"One or two of them are quite threatening individuals, but I just hasten to say people should take some confidence from the fact they're under 24-hour surveillance so their capacity to do a lot is limited.

"My concerns always are not about the people that we know about, it's the ones that we don't know about."

Mr Key said there would be no change in New Zealand's role in Iraq following a United Nations resolution over the Paris attacks.

"On the military front we're not looking to do any different ... there's no intention to move beyond where we're at, because where we're at is a pretty decent contribution and I think recognised as such."

Photo: New Zealand Defence Force

The UN Security Council, which includes New Zealand, voted unanimously to call on member states to act against IS.

New Zealand troops are training Iraqi soldiers to fight against IS and Mr Key said that role would not be expanded.

"We have different options available to us than say a country like the United States, that can have air strikes, or France for instance, we just don't have that capability.

"The point is, do we want to be there forever, and I think that's the real risk, that you get stuck there forever.

"It's quite a commitment, it's well over 100 people, it costs quite a lot and we're making a difference, but at some point we should come and go from that scenario."

24-hour surveillance 'not the new normal'

Constant surveillance of people believed to be a security threat to New Zealand was unusual for this country, but one security expert said this was not "the new normal".

Professor Robert Ayson - a professor of Strategic Studies at Victoria University - told RNZ today people who were put on such a watchlist were at the "highest level of concern", but the fact it was only a few people, as the Prime Minister said, suggested the threat was not huge.

"In a country of 4.5 million people, having one or two people under constant watch doesn't suggest something particularly massive, and it's pretty modest compared to other liberal democracies around the globe."

He said other countries such as the US, Britain and France had been carrying out similar surveillance for "significantly longer".

Prof Ayson said this case was the first time he had heard of 24-hour surveillance in New Zealand for security issues, although he said certain criminal cases would have a similar level of snooping.

But he added it did not necessarily suggest a permanent shift in New Zealand's spying situation.

"People talk about these things as if they are the new normal, but I don't fully accept that. The IS situation in Iraq and Syria is quite fluid, the issue of foreign fighters connecting themselves with IS is quite fluid."

He said new levels of technology allowed all sorts of surveillance possibilities, but it was still a hugely labour-intensive task keeping track of somebody's every movement, with people needed to watch the footage and analyse the data, as well as carry out any physical surveillance.

Prof Ayson also backed up the Prime Minister's comments that it was the people the security forces didn't know about who were the real issue.

"You never know when people take it upon themselves to change their mind or whatever. You can have all the surveillance power in the world, and it will not necessarily make you any safer from people you don't know about."