Prime Minister John Key says New Zealand contributes information from a number of spy programmes into Five Eyes databases but has no control over what intelligence its partners gather.
Asked on Nine to Noon about the allegations by US whistleblower Edward Snowden that mass surveillance is already underway using the NSA's tool XKeyscore, Mr Key again declined to discuss particular programmes.
But speaking of Five Eyes databases in general, he said New Zealand will contribute information. "That's because if we have a particular person of interest, lets say they're a foreign fighter, just a simple example, that information would be shared."
He said New Zealand had no control over intelligence-gathering of its partners in the Five Eyes network- the United States, Britain, Canada and Australia.
"We don't control what other agencies and other people collect. There might be a variety of reasons for that.
"So it's true there will be New Zealanders there and Americans may have gathered information across a whole lot of reasons, legitimately. It might be for hundreds and hundreds of countries, but what is absolutely also true is that we can't circumvent our law."
New Zealand could contribute information both on foreigners or New Zealanders. For example, he said, information would almost certainly have have been gathered on the New Zealander killed in drone strike in Yemen, legitimately under warrant, and that would be shared.
Mr Key said Edward Snowden's statement that in his work at the National Security Agency he regularly came across information about New Zealanders, gathered by New Zealand, was incorrect on a crucial point.
"He said we were contributing that metadata and that's not true. We're not collecting wholesale information. We don't have the capability for mass surveillance."
"He's making an assumption ... I don't think he understands the compliance regime in New Zealand."
No indiscriminate interception
The Inspector-General of Intelligence and Security has entered the debate on mass surveillance saying no indiscriminate interception of New Zealanders' data has been identified to date.
The Inspector-General, Cheryl Gwyn, issued a statement last night in response to questions from Checkpoint.
"As part of my role as Inspector-General, I review whether the GCSB complies with the restrictions upon interception of New Zealanders' communications and with the requirement to intercept communications only for authorised purposes. That review is ongoing."
"I am only able to comment on specific GCSB activities through my annual and inquiry reports. However, I can advise that I have not identified any indiscriminate interception of New Zealanders' data in my work to date. I will continue to monitor these issues."
Investigative journalist Glenn Greenwald has dismissed the assurances saying says documents from the United States' National Security Agency make it clear the NSA and the GCSB developed a mass surveillance programme.
He says it is possible the NSA collects most of the data on New Zealanders.
"Even if they were just opening the door and allowing the NSA to mass collect surveillance - so that's communications activities of New Zealand - that would still be the government working on a system of mass surveillance.
"Not only are they collaborators in the collection of data they then have access to that data through the XKeyscore system."
Mr Greenwald said Ms Gwyn should also be aware of the global pattern for intelligence organisations to keep the people in charge of them in the dark about their true role.
Call for more NSA detail
Forensic IT investigator Daniel Ayers has asked Mr Key in a letter he's released to explain a declassified diplomatic cable from 2004 showing the NSA wanted another spy in the country to collaborate on signals intelligence.
He also wants more detail about spy programmes XKeyscore and Boundless Informant and said documents show New Zealanders' data was being captured.
Mr Ayers, director of Special Tactics Ltd, said Mr Key's denials about mass surveillance of New Zealanders are carefully crafted to work around the truth.
Cunliffe consults ex-Labour leaders
Labour leader David Cunliffe said he had spoken to former leaders of the party and there was no indication it had any involvement in setting up National Security Agency operations in New Zealand.
Claims have been made by Snowden, that there were American spy facilities in Auckland and the north of the country.
Mr Cunliffe said he had spoken to former party leaders, including Helen Clark, and he had absolutely no information that he would be concerned about.
"Labour has always responsibly and properly conveyed its role in respect of the security portfolios," he said.