Story highlights A political scandal has engulfed New Zealand politics ahead of elections this month

It was sparked when a journalist published the hacked emails of a blogger

He says the emails show a strategy by the government to smear political opponents

A senior minister has resigned, yet the government still leads in polls

New Zealand politics, concedes Bryce Edwards, one of the country's leading commentators on the subject, "can tend to be on the bland side compared with other countries."

And at the start of last month, New Zealand's impending September 20 general election looked set to be just that: a tame affair, with an all but foregone conclusion.

The center-right National government, led by perennially popular Prime Minister John Key, enjoyed a huge lead in the polls and seemed destined to amble its way to a third term in power.

But then a bombshell struck in the form of a book-length piece of investigative journalism, triggering a cascade of scandals that have thrown the political parties' campaigns into disarray and dominated the news cycle for weeks.

"No campaign in living memory compares to the 2014 campaign," said Edwards, a lecturer in politics at the University of Otago.

"New Zealand election campaigns are usually fought over a mixture of policy and personalities," he told CNN, "not over issues of integrity and corruption and wrongdoing."

'Dirty politics'

Last month, long-time freelance investigative journalist Nicky Hager published "Dirty Politics." The book is based on a cache of emails and social media messages hacked from the private accounts of the controversial right-wing blogger Cameron Slater, whose "Whale Oil" blog is widely read.

Slater, a polarizing and politically well-connected figure whose father is a former National Party president, is notorious for his abrasive style and for breaking a string of scandals, including an extramarital affair by the mayor of Auckland last year. The mayor subsequently acknowledged the affair.

Hager's book alleges close and sustained cooperation between the blogger and senior government figures -- including a senior minister and top prime ministerial aides -- in their concerted efforts to smear political adversaries.

The extent of the alleged collaboration suggested in the hacked emails surprised even the book's author, he told CNN.

"This was prime ministerial staff involved in coordinating and executing attacks on the government's political opponents," said Hager. "It was much more orchestrated and constant -- relentless -- than anyone had been aware."

Minister toppled

In the book's wake, a senior National lawmaker, Judith Collins -- who admits to a close friendship with Slater -- has resigned as justice minister over leaked emails suggesting she was involved in a campaign to undermine the head of the government's Serious Fraud Office.

The other investigation will be conducted by the Inspector-General of Intelligence and Security -- the watchdog for the Security Intelligence Service (SIS), a national intelligence agency -- into allegations that secret information had been declassified and passed to Slater for political purposes.

The scandal has put the prime minister's relationship with the blogger under close scrutiny. Key has told reporters that he talks to Slater three or four times a year, and occasionally sends the blogger a text message when he doesn't understand a story he has written.

Key would not comment to CNN on his relationship with Slater or the allegations made by Hager, other than to say in a statement through his spokesman that "it was a left-wing conspiracy based on stolen emails and cynically timed to derail the government's election campaign."

Nicky Hager, the freelance journalist whose book has triggered the scandal.

He has previously denied to the Otago Daily Times newspaper that he had involvement in any of the allegations in the book, and told reporters that Slater's actions were solely his own.

Meanwhile the hacker behind the leaks, who goes by the name "Rawshark," continued to anonymously dump hacked correspondence online, unearthing fresh dimensions to the scandal, until Slater obtained a High Court order banning him from further releases of his correspondence.

"Rawshark," tweeting with the handle "WhaleDump2," signed off with a warning to practitioners of dirty politics, "present and future: Don't make me come out of retirement."

House of cards?

The deepening layers of intrigue have led some commentators to liken the situation to a South Pacific "House of Cards," a comparison the man at the center of the scandal is familiar with.

"All of a sudden I'm supposed to be some sort of Frank Underwood-style person who's the center of a massive conspiracy," Slater told CNN, referring to the scheming politician at the heart of the hit U.S. show.

He claims the only conspiracy revealed by the scandal is the one against the government, which saw his emails illegally hacked in order to present "a picture that is not fair and balanced."

"I think people can see it for what it is... an attempt to pervert our elections and bring down our government using criminal means," he said.

He said he had filed a police complaint about the stolen emails, and a Privacy Commission complaint against Hager.

Hager's book, he argued, was "not a journalistic effort" as it had presented a biased picture -- omitting Slater's dealings with figures on the political left, and not allowing Slater or others the right of reply before publication.

Hager told CNN he did not offer Slater and others named in the book a right of reply, as to do so would have presumably led to injunctions that would have prevented the publication of information in the public interest. He felt the emails presented concrete evidence that could not simply be explained away, he said.

Dotcom's 'bombshell'

Slater also alleges that the wealthy German tech entrepreneur Kim Dotcom, who has emerged as a political player of consequence at this election, was involved in the hacking of his accounts.

Dotcom, who was granted New Zealand residency in 2010 and is fighting extradition to the U.S. on criminal charges, strenuously denies the allegation.

"I have nothing to do with Hager's book. I have not hacked Slater. I haven't hired anybody to hack Slater. I don't know who hacked Slater," he told CNN.

Cameron Slater, blogger

Dotcom, who has prior convictions including computer fraud and data espionage, is wanted in the U.S. on criminal copyright charges, accused of costing the entertainment industry hundreds of millions of dollars in lost revenue through his now defunct cloud storage site, Megaupload.

His drawn-out legal battle against extradition -- which will be heard in New Zealand courts in February -- has put him at odds with the New Zealand government. This year he entered the political fray in earnest, forming and bankrolling the Internet Party which has campaigned for Internet freedom, copyright reform and reduced government surveillance.

The new party has allied with the Maori nationalist Mana Party, which currently has only one seat in parliament, in a partnership the commentator Edwards previously described to CNN as "like Mark Zuckerberg getting into alliance with Fidel Castro."

While very much a fringe political force, the alliance has already proven to be a rowdy and disruptive new presence on the political left, with current polling suggesting the group could pick up three seats in in the new parliament.

Under New Zealand's electoral system, the two major parties -- the center-right National and center-left Labour -- are typically required to make coalitions with smaller parties to form a government, meaning that minor parties can carry influence beyond their size if they hold the balance of power.

Dotcom -- who has repeatedly stressed his personal animosity towards the PM on the campaign trail -- said that Hager's book had "turned this New Zealand election upside down. "There's a real chance that National will not form the next government because Prime Minister John Key and his office have been exposed in a Watergate-style scandal," he said.

"Whoever the hacker is, by exposing these unethical and unlawful methods of the National government, he has done the people of New Zealand a favor. They will decide if John Key will get another term on September 20. I don't think so."

Dotcom is promising to drop his own bombshell at an event to be held at Auckland's Town Hall five days before the vote, featuring NSA leaks journalist Glenn Greenwald and a video-link with Wikileaks founder Julian Assange, which he is billing as a "moment of truth."

But Edwards warns the Internet Party could suffer some blowback for their confrontational, anti-government approach in a campaign that has been marked by more personal abuse than voters are accustomed to. Dotcom, for example, was criticized when news media ran footage showing him addressing a youthful crowd chanting "F*** John Key" at an Internet Party event.

"People perceive that Dotcom and his party have taken a much more anti-establishment and aggressive approach towards the government that has changed the tone of the campaign," said Edwards.

So who is 'Rawshark'?

Tech entrepreneur Kim Dotcom

Journalist Hager has also rubbished Slater's theory, saying Dotcom had nothing to do with the hack.

He told CNN he had obtained Slater's hacked emails when he was investigating the government's links with "attack bloggers" and heard rumors from contacts in the tech community that Slater's computer had been hacked during a denial-of-service attack.

He said he located the hacker and persuaded him to hand over what he had. The hacker's motivation for the attack on Slater, said Hager, was anger over a controversial posting the blogger had made following the death of a young man in a police car chase, in which he described the deceased as a "feral" who "did [the] world a favor" by dying.

The publication of the emails, said Hager, was in the public interest, as it had confirmed the existence of a new, cynical and underhand brand of politics that had come to be practiced in New Zealand in the age of social media. That model allowed politicians to avoid the taint that came with practicing negative politics by farming their dirt out to closely-affiliated "attack bloggers."

"You can get stories out without having to go into parliament and front them yourself, without having to go through the news media -- you can have smears and scandals and scoops and leaks run through your partisan arms-length organs and jumping from there into the media."

He said he believed Key must have been aware of the alleged media strategy with Slater.

Conspiracy theorist?

Others have a different take.

Key has rejected Hager's claims outright, dismissing him to reporters as a "screaming leftwing conspiracy theorist." He told CNN through a spokesman that the release of the emails was politically motivated, yet polls showed it had failed to derail the government's election campaign; the latest One News-Colmar Brunton poll puts National at 50% and its major rival Labour at 26%.

"People want politicians to focus on the issues that matter to them, such as the economy, health, education and law and order," said Key.

David Farrar, another popular right-leaning blogger with strong links to National, dismisses "the whole theory that Hager has wrapped around the book, which is that Cameron Slater is some tool of National."

"Was it systematic? No," said Farrar, who also owns a polling company that has done work for the National Party. "As Cameron's grown in power and influence, through his own effort, certainly people in National have tried to get favorable stories on his blog, just as dozens if not hundreds of other people have. I know for a fact people on the left have given him information too."

Farrar, whose private correspondence with Slater, a friend, was included in Hager's book, told CNN he did not believe there was sufficient public interest in the matter to warrant publishing hacked personal communications.

Despite the wall-to-wall media coverage of the scandal, National had scarcely been affected in the polls. Where the left saw a conspiracy, he said, others merely saw politics as usual.

"I'm not sure the public are surprised by this," he said. "When you're involved in politics, you have a go at your opponents, and that may involve giving stuff to blogs."

'All bets off'

But Edwards said he believed that the election had now become a genuine contest.

"The problem for National is they only need to lose a few percent in the polls and they become extremely vulnerable," he said, due to the possibility Labour and other opposition parties could cobble together the numbers against them. "Suddenly all bets are off."

It remained to be seen whether public revulsion over the scandal would trigger a clean-up of political conduct, or usher in a new age of gloves-off politics.

"It's certainly my feeling that the book coming out is like a nuclear button being pushed," he said.

For his part, though, Hager said he takes an optimistic view of the effect his book will have.

"I believe there will be quite a re-evaluation," he said. "That doesn't mean that unscrupulous politicians and PR people will suddenly become saints. But there will be a much higher cost -- and it will be much more difficult to get away with."