United States law enforcement authorities have confirmed they are investigating images of child abuse unearthed from Kim Dotcom's Megaupload servers.

The material was discovered during FBI examination of the contents of the internet millionaire's cloud storage system, seized in the global takedown of the "Mega Conspiracy" that included police raids at Dotcom's Auckland mansion in January.

Dotcom, 38, is currently on bail awaiting an extradition hearing. Authorities say he used Megaupload and its affiliated sites to knowingly make money from pirated movies and games, and have charged him with multiple copyright offences.

A spokesman from the United States Attorney's Office for the Eastern District of Virginia, Peter Carr, said there was an ongoing investigation into the images of child pornography found on the servers but would make no further comment.

Experts say Dotcom is unlikely to be held accountable for the child pornography also uploaded to the Mega websites.

The laws covering objectionable material had broader "safe harbours" that ensured online service providers were not blamed for the actions of their users, said New Zealand internet lawyer Rick Shera.

"It's absolutely impossible for a cloud service to scrutinise what's on its servers."

"The implications of being charged with possession of objectionable material are much more serious [than copyright]. It's unfair and inappropriate that an online service provider is charged if they're not involved."

US Homeland Security Child Exploitation Investigations Unit spokesman Matthew Dunn said his organisation did not target cloud storage owners unless it could prove they were facilitating illegal activities involving child abuse.

"We go after the people that were sharing the objectionable material," Dunn said. There were instances where internet forums had been shut down, but cloud computing sites and social networks usually did not want illegal activity on their sites and would co-operate to remove the material.

Director of the Kiwi child protection agency Ecpat, Alan Bell, said targeting host site owners was not useful in preventing further abuses.

"The real scrutiny should be directed at offenders who use those facilities for their own purposes."

Meanwhile, prominent German magazine Stern has slated Dotcom as a narcissistic man who acted more like a "big kid" with no thought of consequences and careless with money.

The weekly news magazine devoted a six-page spread to the former German citizen now living in New Zealand under tight restrictions as he fights an extradition process to the US where authorities have charged him with copyright breaches.

His former teacher, Gabriele Killig, told Stern that even as a child Dotcom longed for recognition and was a constant attention seeker. "Kim didn't have any friends, was always an outsider and compensated by being the class clown. He was tolerated but not accepted by his classmates. There was never the right place for him," Killig is quoted as saying.

New Zealand property developer David Blackmore is quoted talking about a falling-out over personalised number plates.

The magazine said Dotcom paid $20,000 for the number plate GOD and had pressured Blackmore to give up SATAN, JESUS, and EVIL for $100,000.

"I experienced what kind of narcissistic control freak he is. He wouldn't back down until he got his way," Blackmore is quoted as saying.

Blackmore also criticised Dotcom for being obsessed with playing video games. At one point Dotcom set a world record for the game Call of Duty: Modern Warfare 3, raking up 180,000 kills in 702 hours.Others who remained anonymous in the article described Dotcom as careless with money, spending it "like a big kid who wanted to amuse himself with no thought about the consequences".

Another said he was never seen taking drugs or drinking alcohol, preferring to give them out to others to have fun.

The magazine also claims that in 2002 Dotcom pulled a controversial stunt that the magazine said was an announcement of suicide. It said Dotcom posted: "Enough is enough. Kim Schmitz will die next Monday. You can watch live and for free on the website."

However, the timing coincided with him adopting the new surname Dotcom.