Wellington: New Zealand`s spy agency failed to follow basic procedures when it gave top secret security clearance to a scientist who turned out to live in a fantasy world, Prime Minister John Key said on Friday.
Stephen Wilce resigned as head of New Zealand`s defence science agency in September after it was revealed he had made a series of false claims about his past, including serving as a helicopter pilot with Prince Andrew.
Key on Friday released a report from public service watchdog the State Services Commission examining why New Zealand`s Security Intelligence Service (SIS) did not detect any problems when Wilce was recruited in 2005.
"The report finds the vetting process in respect of Mr Wilce failed to follow basic procedures in the provision of a professional security service," Key said.
Wilce served as chief of the Defence Technology Agency for five years, heading 80 staff and enjoying access to highly classified intelligence as he advised the military on science and technology issues.
The British-born scientist quit after a television programme revealed he falsely claimed to be an ex-Marine combat veteran and an Olympic bobsledder who raced against the Jamaican team depicted in the 1993 film "Cool Runnings".
Further inquiries by military investigators found he had told colleagues he was once a helicopter pilot who served with Prince Andrew, a spy with British intelligence and a special forces soldier who was on an IRA death list.
Among numerous other fabrications, he also said he designed the guidance system for the Polaris missile system, was a member of the Welsh rugby union team and once had a career as a guitarist on the British folk music circuit.
Wilce told the investigators he had been telling tall stories about himself since childhood.
Key, who has previously played down the threat Wilce posed to national security, said SIS screening procedures had been tightened since 2005 and further work was being done to make them more efficient.
"The State Services Commissioner has said further action needs to be taken to demonstrate confidence in the vetting system, and he will report back to me in the first half of this year," he said.