A former director of the GCSB says there is mass collection of emails and communications in the Pacific, but the spy agency does not use material about New Zealanders collected inadvertently.

Photo: ANDREW BURNS

The Green Party has laid a complaint with the Inspector-General of Intelligence and Security, saying the Government's electronic spy agency may have broken the law by spying on New Zealanders.

Investigative journalist Nicky Hager says the Government Communications Security Bureau (GCSB) has intercepted communications from countries such as Fiji, Tonga, Vanuatu and Samoa, and even nations as small as Tuvalu, Nauru and Kiribati, and passed the information to the United States.

The Greens say New Zealanders who live, holiday or work in Pacific Islands could have had their data intercepted by the spy agency, and if that was the case, the law may have been broken.

Prime Minister John Key insists the Government's spy agency has acted within the law. He said the GCSB had given him a 100 percent categorical assurance that New Zealanders' information was not gathered other than in circumstances where the law would specifically allow it.

Sir Bruce Ferguson told Morning Report it was impossible to individualise data collection so the GCSB collects it all but discards items it cannot have.

"There will (from) time to time be inadvertent collection, mass collection of these things.

"But the Act specifices that they cannot then use that information, unless they've got specific reasons to use it against New Zealand they can't use it," he said.

"You cannot these days just individually select people ... you put out a big net, catch stuff, you throw out the stuff you don't want ... and you keep the stuff you do want."

Sir Bruce said he was 100 percent confident the GCSB was not acting illegally.

He said any intelligence-gathering involving Pacific Islands was to protect those countries as well as New Zealand.

The south west Pacific is of interest to a lot of coutries including China, Australia, the United States and New Zealand, Sir Bruce said, and intelligence-gathering in the Pacific should not be seen as some nefarious attack on the Pacific islands when it is actually helping them and helping New Zealand.

Privacy lawyer at Chen Palmer, James Dunne, said it was not illegal for the GCSB to incidentally pick up New Zealanders' communications in the context of overseas spying.

"Having got that information there are some real controls on what the GCSB can do with it.

"But one of the things it is allowed to do with it is pass that information on to a public authority overseas."