Government spies overstepped boundaries when questioning a suspect, the security intelligence watchdog has found.
The former inspector-general of intelligence and security, Andrew McGechan, said female "Officer A" should not have warned off former Fiji government minister Rajesh Singh, while grilling him during a raid on his home.
And McGechan has ordered the Security Intelligence Service to stop the practice until it sought advice from the Crown Law Office.
Prime Minister John Key said the SIS "acted lawfully."
"But there's a question over whether the SIS should be able to give warnings ... so we've ceased giving warnings at the moment and we're getting a Crown Law view."
He would be "surprised" if it was ultimately found that it was illegal for the SIS to issue warnings.
"I don't see it as a major," Key said.
The blunder was revealed in one of two reports published today – in line with new spying laws passed last year in the wake of an illegal spying scandal.
In the fallout, agents were found to have misinterpreted the law, allowing them to illegally snoop on New Zealanders.
McGechan investigated a complaint about a joint SIS-police raid in July 2012. Although heavily redacted, his report is understood to relate to Singh. Singh was suspected of involvement in a plot to kill Fiji military leader Frank Bainimarama.
Officer A said she wanted to convey message from the New Zealand Government, the report says.
"A said ... [it] would not tolerate [redacted] whether in New Zealand or not. Anyone involved in planning would be dealt with by the NZ police ... A told [the complainant] he should be careful who he spoke to about the topics which had been discussed."
Singh denied involvement in any plot.
McGechan said SIS was tasked with gathering intelligence, not enforcing measures for security.
"I do not accept that giving warnings in the way noted above could come within the concept of communicating intelligence," he said.
"This in my view, was action taken to enforce security and was beyond powers."
He also noted "this disruption" was planned and not "spur of the moment" and Officer A had believed she was acting legally.
McGechan said the practice of "planned warnings" should stop and legal advice be sought.
He rejected accusations the SIS had invaded the privacy of Singh and his daughter, made "political statements" or deleted Singh's text messages.
In a second report, the watchdog investigated errors made in the Government Communications Security Bureau annual report.
The foreign spy agency wrongly reported the number of interception warrants in force.
This was due to a "definitional misunderstanding and in large part from a legacy record keeping problem", which have been remedied.
"The risk of any recurrence is negligible," McGehan said.
Current Inspector-General Cheryl Gwyn said that under revamped laws, reports resulting from inquiries must be published on the IGIS website.
"The publication of inquiries by my office is an important part of the IGIS role," Gwyn said.
"It will help give the public confidence that there is robust and effective oversight of New Zealand's intelligence and security agencies."
She would make no further comment on the reports.
An SIS spokesperson said Director Rebecca Kitteridge is following up the IGIS recommendation.
''She is seeking Crown Law opinion on whether NZSIS is allowed to warn people and in the meantime will not warn people.''
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