Spied on illegally ... Kim Dotcom.

Extradition delayed ... Kim Dotcom. Photo: Reuters

A US bid to extradite Megaupload boss Kim Dotcom from New Zealand for alleged online piracy has been delayed for a second time and will not be heard until August next year, his lawyers said on Thursday.

The extradition case, launched after Dotcom's arrest in January for alleged online piracy, was originally due to go to court in August, then pushed back to March next year amid legal wrangling over evidence disclosure.

A spokeswoman for Dotcom's Auckland-based barrister Paul Davison said the court had rescheduled the hearing again to August 2013. She did not provide a reason for the change.

Police are investigating New Zealand's foreign intelligence agency, the Government Communications Security Bureau, for illegally spying on Dotcom ahead of his arrest in a raid on his Auckland mansion in January.

Prime Minister John Key earlier this year issued a public apology to Dotcom, acknowledging the German national should have been off-limits to the agency because he holds New Zealand residency.

It was the latest in a string of setbacks for the case against Dotcom, who remains free on bail in New Zealand, including a court ruling that the search warrants used in the raid on his mansion were illegal.

The 38-year-old's Megaupload file-sharing empire, which at its peak had 50 million daily visitors and accounted for four per cent of all internet traffic, was shut down after the raid and Dotcom has indicated he will seek damages.

Dotcom denies US allegations the Megaupload sites netted more than $US175 million in criminal proceeds and cost copyright owners more than $US500 million by offering pirated copies of movies, TV shows and other content.

The US Justice Department and FBI want Dotcom to face charges of racketeering fraud, money laundering and copyright theft in a US court, which could see him jailed for up to 20 years if convicted.

AFP