New Zealand First leader Winston Peters has called for an inquiry into the entire Kim Dotcom saga to give taxpayers answers about how the affair became a plague on government institutions.

He said he was not speaking in support of Dotcom, who he believes should not have been allowed into New Zealand to live originally.

"There's far more to this than meets the eye. It has so many permutations. Nothing is as it seems."

Peters' comments were sparked by a new High Court judgment that found Dotcom and his three co-accused were eligible for extradition.

While an unsuccessful appeal by Dotcom, the judgment appears to show the entrepreneur was originally arrested on a charge for which he can't be criminally prosecuted or extradited.

Peters said the public deserved answers over the entire debacle.

"We ended up doing Hollywood's bidding ... It was more like Third World than First World," said Peters, who also used the term "banana republic".

Examples included the "bizarre" police raid, with New Zealand's elite anti-terrorist police squad sent in by helicopter at dawn. "We've got an absolute circus going on."

Although Dotcom lost his High Court appeal against extradition, he says at least two years of legal battles remain before he faces the prospect of a plane ride to the United States.

In contrast to Justice Murray Gilbert's overall finding, Dotcom declared the decision a victory because criminal copyright violation could not be a cause for extradition. He said New Zealand did not allow it.

• Kim Dotcom eligible for extradition

Instead, Justice Gilbert ruled that extradition was justified because of US arguments the copyright violation was actually a "fraud".

Dotcom, Mathias Ortmann, Bram van der Kolk and Finn Batato face decades in a US prison after a 2012 raid brought down the Megaupload file-sharing site they set up and ran. They have always maintained their innocence.

The actual evidence of the case has not been argued in New Zealand courts. Legal debate here has been over matching the crimes Dotcom and others are charged with to the crimes listed in the Extradition Act.

In an interview with the Herald, Dotcom said the decision did not mean he would be getting on a plane to the US. There was an appeal to file and probable further legal action.

"We'll be looking at a seven-year total timeframe before there is a final resolution ... I am now more confident than ever that we will prevail."

That would mean two more years of legal struggles before the case worked through the courts.

Both sides are expected to challenge aspects of the ruling before the Court of Appeal -- and eventually the Supreme Court, if it accepts the case. If the Supreme Court upholds the decisions of the District and High Courts, the Justice Minister can then sign the extradition order -- which itself can be challenged in court.

Dotcom said the ruling was a "major victory" because it stated there was no New Zealand equivalent to the US criminal charges of copyright violation.

"The major part of this litigation has been won by this judgment -- that copyright is not extraditable.

"They destroyed my family, destroyed my business, spied on me and raided my home and they did all of this on a civil copyright case.

Yesterday's ruling has created an unusual bureaucratic contradiction: the warrant when Dotcom was arrested on January 20, 2012, said he was charged with "copyright" offences. Likewise, the charges he will face in the US are founded in an alleged act of copyright violation.

Dotcom said there were plans to take a separate court action over the warrant, given it showed he had been arrested for a crime that effectively did not exist in New Zealand.

"My arrest warrant, the document that kicked everything off in New Zealand, is not for fraud. In my arrest warrant, there is nothing about fraud."

Instead, it cited a section of the Copyright Act that dealt only with civil matters.

The Crown Law Office, which is acting for the US, said yesterday it was considering the judgment.

- NZ Herald