A New Zealand intelligence agency which illegally spied on Megaupload boss Kim Dotcom may have also misused its powers in dozens of other cases, an official report found Tuesday. Prime Minister John Key said the report into the Government Communications Security Bureau (GCSB) was "sobering reading" and revealed long-standing problems with the agency's practices and culture. "I acknowledge this review will knock public confidence in the GCSB," said Key, who is the minister responsible for the organisation.

An appeal court Thursday backed Megaupload boss Kim Dotcom's right to sue New Zealand's foreign intelligence agency for illegally spying on him as part of a US probe into alleged online piracy. The Court of Appeal refused a government request to overturn a High Court decision in December that said he can seek damages from the Government Communications Security Bureau (GCSB) over his treatment.

(Adds detail, background) By Naomi Tajitsu AUCKLAND, Jan 19 (Reuters) - Kim Dotcom, founder of outlawed file-sharing website Megaupload, said his new "cyberlocker" was not revenge on U.S. authorities who planned a raid on his home, closed Megaupload and charged him with online piracy for which he faces jail if found guilty.