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Although no evidence to the contrary has emerged, it exists, according to Dotcom, who says he will keep those cards close and reveal them only at the extradition hearing.

Dotcom and Key would finally confront each other at the Parliamentary inquiry into the new spy laws. "He knew about me before the raid," said Dotcom. He turned to smile at Key, holding his gaze: "You know I know."
"Why are you turning red, Prime Minister?" said Dotcom.
"I'm not," responded Key. "Why are you sweating?"
Dotcom, with his trademark black scarf around his neck, said: "I'm hot."

If Dotcom is right, then it would destroy Key. The New Zealand Herald's John Armstrong wrote: "If it stands up, Key's resignation might well be in order. It is as simple as that."

High stakes. But who is bluffing?

LONG BEFORE THE US came looking for Kim Dotcom, there was keen awareness in New Zealand's government of US interest in copyright issues. Diplomatic cables released through Wikileaks show efforts to influence New Zealand's stance on copyright as the country attempted to update old laws to cater for new technology.

On 30 October 2007, US Ambassador Bill McCormick met the former Labour Party trade minister Phil Goff to directly lobby on behalf of the Motion Picture Association of America, and other copyright holders. McCormick expressed concern the proposed changes to New Zealand law on copyright were "overly biased in favor of consumers rather than the copyright holder". The Ambassador told Goff of "specific technical corrections" which would be needed.

The meeting ended, according to the diplomatic cable, with Goff assuring the Ambassador that "Prime Minister (Helen Clark) was aware of (US government) concerns regarding the copyright bill, and had heard directly from members of the IP industry in her capacity as the Arts Minister". The cable noted that any future free trade agreement would require conformity with US demands around copyright protection and liability.

Progress on the bill was slow, leaving it to the incoming National government to handle. The US Embassy met with the new government in 2009, this time with Simon Power, who was Commerce Minister and Justice Minister.

By early 2009, there were public protests over the controversial

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