The Kim Dotcom saga continues to unfold in New Zealand after the country’s prime minister ordered a full enquiry into claims that the Government Communications Security Bureau (GCSB) unlawfully spied on the Megaupload founder.

New Zealand PM John Key called the GCSB’s efforts to intercept Dotcom communications illegal after it emerged that the agency — the country’s equivalent of the FBI – had wiretapped his communications as part of the sting without receiving the necessary authority and permissions, Investigate Magazine reports.

A statement from Key, in which the prime minister “expressed his disappointment that unlawful acts had taken place”, read:

“I expect our intelligence agencies to operate always within the law. Their operations depend on public trust. I look forward to the Inspector-General’s inquiry getting to the heart of what took place and what can be done about it because this is also a matter for the High Court in its consideration of the Megaupload litigation.”

Dotcom took to Twitter to welcome the enquiry and he likened the latest twist to that of a James Bond film:

Authorities have been criticized for the perceived mishandling of a number of issues around Dotcom’s arrest and subsequent trial.

Police have been accused of acting with a heavy hand when footage of the raid on Dotcom’s mansion was aired in national television. Multiple helicopters and several police vehicles converging on his mansion while the multi-millionaire German Dotcom claimed he had been punched, kicked, kneed and otherwise treated unfairly during his arrest.

Authorities suffered a significant blow in June when the New Zealand high court ruled that search warrants for the raid were invalid.

Despite the trial ongoing Dotcom has continued his efforts to revive the Megaupload service and today he claimed that work is now 90 percent complete. Developers were offered early access to the project last month.

The Megaupload founder, formerly Kim Schmitz, is also working on music service Megabox, which he said will launch before the end of the year alongside a revamped Megaupload, that is said will not be operation in the US.

The US Department of Justice closed Megaupload down in January, in what it called one of the largest cases of copyright fraud ever. While there may have been infringing content on the site, many of its users have lost photos, files and other memories stored to the backup service.

Dotcom extradition hearing is set to take place in March 2013. The date was rescheduled from August 2012 following a series of issues relating to the way that police has handled the case.

Image via Getty Images / AFP