The government's foreign spy agency was not just gearing up to undertake mass surveillance - it had taken active steps to implement it, the journalist at the centre of tonight's "Moment of Truth" event says.
American journalist Glenn Greenwald will tonight release a report based on US National Security Agency documents, leaked by fugitive whistle-blower Edward Snowden.
The impending release of the files forced the Government to admit its foreign spy agency was gearing up for mass surveillance in the wake of an illegal spying scandal.
Prime Minister John Key said the Government Communications Security Bureau teamed up with overseas intelligence agencies, including the US, to boost its capability for wholesale snooping.
It was working on the proposals for more than a year, before Key says he put it on hold in March 2013. However, the Government beefed up spy legislation last year which critics say leaves the door open for mass surveillance in the future.
NSA documents showed "phase one" of the proposed GCSB programme, which involved tapping into the underwater internet cable that connects New Zealand to the world, was already complete, Greenwald said.
Phase two - indiscriminately "sweeping up" large amounts of metadata to find out who New Zealanders were talking to - needed a law change before it could be implemented, he said.
"They were working with the NSA on what the steps and the progress they were making was and they were simply waiting for enactment of the new law that they thought would give them whole new powers to be able to do this, at the very same time the Prime Minister was assuring the public that this new law would give them no powers."
"It's really a case of systematic misleading of the public," he said.
Key said he would be "highly surprised" if Greenwald had evidence the NSA had conducted mass surveillance on New Zealanders, as the Five Eyes countries had an informal agreement they would not spy on each other.
He would not be drawn on whether New Zealand had spied on its trading partners, speaking on Newstalk ZB this morning.
There were "always good reasons" for the GCSB undertaking its activities, but Key said he would not comment on foreign intelligence.
He said Greenwald was trying to hijack the election by doing Dotcom's bidding five days before New Zealand went to the polls.
"Dotcom is trying to save Dotcom's butt, and it's a reasonably large one so he's brought in all of these people, three little butts to save his butt.
"It won't work but they'll say and do anything to bamboozle people," he told Newstalk ZB.
'DON'T BELIEVE THEM'
Greenwald says the Government hasn't been truthful about the GCSB legislation, which passed into law in August 2013.
Key insists Greenwald is "absolutely wrong".
"He said the GCSB is undertaking mass surveillance against New Zealanders. They are not. There is no ambiguity, no middle ground. I'm right, he's wrong."
He says he has documents, including a Cabinet paper, to back his claims. But he won't release them until Greenwald reveals what he has. And he accused the Pulitzer Prize-winning journalist of playing politics, by staging a "sound and light show" with Internet Party founder Kim Dotcom, just days before the election.
Greenwald will join Dotcom at a "Moment of Truth" event tonight in Auckland, where he is set to detail his claims about the GCSB.
Key claims the Snowden documents tell only half the story - that Cabinet signed off proposals for the GCSB to investigate "widespread cyber protection" in early 2012 after two "significant" cyber attacks on Kiwi companies.
But he says that after a year he stopped the work as an internal review unearthed a raft of problems at the agency.
That review, by Rebecca Kitteridge, was sparked when illegal surveillance of Dotcom came to light in September 2012. Her report found a further 88 Kiwis were unlawfully snooped on over a decade.
Key says the public should trust him, but he won't declassify the top secret documents until Greenwald fronts up. "It's incumbent on him [Greenwald] to release his documents. He releases things, we'll prove that we're right."
New Zealand's participation in wholesale spying programmes has been the focus of speculation since the first NSA leaks in June 2013. Key has said he would resign if the GSCB were found to be carrying out mass surveillance.
Asked why he didn't previously release the top secret papers, he said: "Because it wouldn't have saved any trouble. These guys would have come into town with a sound and light show and made up lots and lots of stuff."
Despite no other world leaders disputing Greenwald's previous disclosures about other countries in the Five Eyes alliance, Key said: "He's absolutely wrong . . . he's releasing hacked information which is presenting a picture which is completely incomplete . . . what I can say to New Zealanders is do not believe them."
Labour leader David Cunliffe was non-committal yesterday on whether the papers should be declassified. "Frankly it's between him and Mr Greenwald."
November 2011 - Two un-named New Zealand companies come under signficant "cyber attack"
Early 2012 - In response, GCSB suggests it starts looking at carrying out mass surveillance. Key takes the idea to Cabinet, which authorises the agency to begin work with other intelligence partners in the Five Eyes network.
September 2012 - It emerges the GCSB had illegally spied on Kim Dotcom ahead of the January 2012 raid on his home
October 2012 - Rebecca Kitteridge is seconded to the GCSB to begin an internal review
March 2013 - Key tells the GCSB to put its business case into mass surveillance on hold
April 2013 - Fairfax reports that the Kitteridge review found the agency illegally spied on 88 Kiwis over a decade
May 2013 - The Government introduces two pieces of legislation to beef up GCSB and SIS powers
June 2013 - The first leaks from NSA whistleblower Edward Snowden appear, sparking a global debate on privacy and spy agencies
August 2013 - The GCSB bill passes, despite protests.
*Comments have been closed on this story
- Fairfax Media
Should the speed limit be raised to 110kmh on some roads?Related story: 110kmh limit moves closer