The Prime Minister has retiterated he is confident the Government's electronic spy agency's activities comply with New Zealand law.

Photo: RNZ / Alexander Robertson

Last week journalist Nicky Hager, citing information from US whistleblower Edward Snowden, claimed the Government Communications Security Bureau (GCSB) was collecting mass amounts of data on Pacific countries and passing it to the NSA in the United States.

The former head of the GCSB Sir Bruce Ferguson confirmed the mass collection of communications in the Pacific, but told Radio New Zealand items relating to New Zealanders were discarded.

The Green Party has laid a complaint with the Inspector-General of Intelligence and Security saying the bureau may have broken the law by spying on New Zealanders.

Mr Key told Morning Report he was not prepared to confirm or deny Sir Bruce Ferguson's claims.

But he said the law was very clear on the GCSB.

"They have the capacity to collection information against the New Zealander but only under very, very limited conditions, and the question is are those conditions met.

"The legal advice I've had from the GCSB and the assurances I've had is those conditions are met."

For the most part when the GCSB acts, it does so under warranted authority, he said.

"You see, you get a whole bunch of basically bush lawyers and people who have a particular agenda wanting to put out their particular phrases, that actually don't mean anything, which suit their interpretation.

"There's a particular warrant, for the most part, that supports basically what people do."

Internet businessman Kim Dotcom told the programme the prime minister should resign over the latest spying revelations.

He said the Government should be serving the people not spying on them and Mr Key should make good his previous promise to resign if mass surveillance was shown to be taking place.

New Zealanders had the right to know if their communications were being collected en masse, he said. "The government is serving for the people, the public votes them into government, of course we have a right to know."

Photo: RNZ / Kim Baker Wilson

Allegations of mass surveillance were raised during the general election campaign last year at an event organised by Mr Dotcom's Internet Party. US National Security Agency whistleblower Edward Snowdon told the gathered audience via video link the NSA was already operating in New Zealand out of a facility in Auckland and one further north, and agencies could access masses of information through a tool called XKeyscore.

The United States is attempting to extradite Mr Dotcom to face copyright and money-laundering charges over his Megaupload website.