Police have been asked to investigate whether more than 80 New Zealanders were illegally spied on.
Green Party leader Russel Norman has asked detectives to extend their inquiry into the unlawful snooping on tycoon Kim Dotcom to include the spy scandal revealed this week.
A report by Cabinet Secretary Rebecca Kitteridge raised questions about surveillance by the Government Communications Security Bureau (GCSB) on behalf of domestic spy agency the Security Intelligence Service.
The GCSB is only allowed to spy on foreigners.
It comes after Auditor-General Lyn Provost declined yesterday to investigate the appointment of spy boss Ian Fletcher.
Norman has called for a commission of inquiry into the intelligence services. But he fears the Government will block any "in-depth inquiry".
"That is why we have also contacted the police, so at least the legal issues can be investigated," he said.
"Our spies must be held to the same standards as other New Zealanders. They are subject to the laws of this land and must be held accountable by the police and the courts if they violate those laws."
Norman also wants Parliament's intelligence and security committee, which meets behind closed doors, to investigate Fletcher's appointment in September 2011.
But Key accused the Opposition of using the auditor-general to try to keep controversies in the media.
Speaking in Beijing, where he is on a week long trade mission, Key said time and again the Opposition had called for inquiries, but nothing had come from it.
"People need to take Labour not with a pinch of salt, but with a bucket of salt," Key said.
"If you read the auditor-general's statement, it's absolutely crystal clear that I acted totally above board, properly, and that there was nothing for her to investigate."
He added: "Every time there is any kind of issue, Labour and the Greens call for an inquiry, and the reason they do that is they want to carry it on and have the media report it as a story...It's just a stunt," Key said, although he declined to comment on whether repeated attempts to have the auditor-general investigate were an abuse of process.
Provost said the prime minister had responsibility for the appointment, the statement said.
"As with many other ministerial appointments, the responsible minister therefore has considerable discretion about how appointments are made. He or she is accountable to Parliament and the public in the usual way for those decisions."
Fletcher was appointed in September 2011, but this created a storm in recent weeks since it was revealed he was shoulder tapped by Key in a phone call.
Fletcher - formerly a high-flier in the British and Australian civil service - was the only person interviewed for the job. The pair are childhood friends.
The statement added: "The State Services Commission provided support to the prime minister in this appointment process. Although it appears that the process initially envisaged by the State Services Commission did not eventuate, we do not regard that as necessarily requiring investigation. It is relatively common for recruitment processes to adapt as they progress, depending on the applications received."
State Services Commissioner Iain Rennie said last week he was surprised Key made the July 2011 phone call, but has defended the appointment and Key's role as professional.
Provost considered questions raised by the appointment could be "adequately addressed through the normal processes of public and parliamentary accountability".
Key repeatedly said Fletcher was the right person to run the bureau, which he said needed an overhaul.
Labour's deputy leader Grant Robertson laid the compliant earlier this month. Labour have demanded an independent inquiry into the intelligence services.
- Fairfax Media
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