Prime Minister John Key has rejected a claim by American whistleblower Edward Snowden that the US National Security Agency (NSA) has bases in New Zealand, calling it "unsubstantiated".

It was unlikely NSA spies would be in the country without his knowledge, Key told reporters in Dunedin.

Snowden and journalist Glenn Greenwald claimed New Zealand metadata was caught in US dataharvesting, during an event in Auckland last night.

SPY BOSS: Sir Bruce Ferguson was director of the Government Communications Security Bureau for five years.

Via video link, Snowden said the NSA had two "facilities" in New Zealand, one in Auckland and another in the north.

"The only bases that operate in New Zealand that I'm aware of are New Zealand ones," Key said.

"I'm not going to talk about their [NSA's] capability or their people but we exchange people from time to time so I wouldn't do that. But we don't operate a base with NSA.

SPY BOSS: Sir Bruce Ferguson was director of the Government Communications Security Bureau for five years.

"What I can say is absolutely without doubt New Zealanders are not subject to mass surveillance by the GCSB [Government Communications Security Bureau], and they never have been," Key said.

"There wasn't any evidence to support these claims, they're simply not right. There is no mass surveillance of New Zealanders, there never has been mass surveillance I'm just not going to go into ... the particular techniques we use."



Any material had to be collected for legal and legitimate reasons, he said. New Zealand could not use an international agency to circumvent its own laws.

"Edward Snowden may be right about one point - that if you looked in database there would be some New Zealand content in there, for very legitimate and legal reasons. But the point he is making was that there was mass surveillance about New Zealanders and their information and that is fundamentally and factually incorrect," he said.

"He didn't provide any evidence to support that claim."

TRAINING FOR THE SPOOKS

Key also refused to comment on claims from a former spy boss that Kiwi agents were trained to use snooping software.

Sir Bruce Ferguson, who was director of the Government Communications Security Bureau 2006 and 2011, declined to comment on specific programmes, including XKeyscore, but said: "As far as programmes in general are concerned, certainly the GCSB gets trained in them; otherwise how can you operate them?"



XKeyscore allows security agencies to search vast databases and nearly everything a person does on the internet, including the emails they have sent and websites they have visited.

Asked whether he would back up Ferguson's claims, Key said he didn't know.



"You'll have to ask them about that - I'm just not going to comment on it."



Ferguson said bureau staff were trained to use the programmes for legal purposes.



"If a legal warrant was issued to access a New Zealander and his or her correspondence, under the warrant that person would use the training to do so," Ferguson said on Radio New Zealand.



He said nothing illegal was done while he was bureau director, and warrants were required before information about a person could be used for surveillance

Snowden and Greenwald last night said New Zealanders were being watched by the GCSB.



According to Greenwald, documents from Snowden showed that in 2012/2013, the GCSB and NSA began working on phase one of a ''mass surveillance program'' called Speargun.



However, Key today said Speargun was a proposal that never became a business case.

"It [was] to look at wholesale cyber security protection. What would have been required under Speargun would have been the gold standard of looking at email traffic that was coming in, to see whether it contained any malware or viruses and ultimately would have spat out the emails that contained that.



"But in the end, to to do that would have been a hugely expensive and difficult proposition and a capability New Zealand doesn't have."



Key said those who claimed mass surveillance was going on, were "kidding themselves".



"But the obvious question is how can we do that when we don't have the capability to do it."



Key said Speargun did not exist, "and never has", but he had already spoken about it extensively during his third reading speech before new GCSB legislation was passed.



"I have a responsibility as Prime Minister to try and help both commercial entities and public entities in New Zealand to protect their data.



"If I don't do that, the very thing we're talking about, which is the secrets and private information of New Zealanders would be at risk to other people that would want to attack those."

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Ferguson said the initial project had not envisaged using all metadata available from New Zealand's undersea internet cable at the time he left the bureau.

But he said he could not comment on anything since that time.

The surveillance of communications was limited to major companies on Ferguson's watch, as he said states and individuals were deliberately trying to access New Zealand's technological data, which made cyber protection necessary.

He would be "absolutely staggered" if that wasn't ongoing, he said, and the project had probably "evolved quite rapidly" since he left.

"We had to get to a stage, and we should get to a stage where we are efficient in cyberspace at protecting our own research and development, to put it bluntly."

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