Anybody who believes that needs their head read. A rogue spy agency, or the New Zealand PM is not telling the whole truth?
However, the internet tycoon's US lawyer says it's too early to say if an investigation into the allegations will halt his case against extradition to the US, where Dotcom is wanted on anti-piracy charges.
Key has ordered an inquiry over interceptions in the Dotcom case by the Government Communications Security Bureau (GCSB) while assisting police to find people subject to arrest warrants.
At a post-Cabinet press conference, Key this afternoon said he referred the matter to the Inspector General last Monday - the same day he learned of the breach. Key said he was "quite shocked", but had confidence in the bureau. He told reporters he had been advised not to make a statement until filing papers with the court.
Key said he believed the incident was an isolated error and did not think it was because New Zealand authorities wanted to "curry favour" with the US.
"On the explanation I have at the moment, it was a mistake, an error, but that's now subject to an inquiry."
He added he was not asked to sign an intercept warrant, "nor was I briefed on the operation in question".
Speaking from the US, Ira Rothken said Dotcom's legal team will await the outcome of the inquiry and did not want to ''pre-judge'' it.
The investigation will deal with ''whether or not the intelligence agency broke the law by essentially spying on folks domestically'', Rothken said.
''It all depends on what the results are and what the prime minister does ... obviously we'd be interested to know if the United States was involved...we'll await the results."
He added: ''I think any time the prime minister orders an inquiry of the intelligence services potentially spying on residents