The 18-year-old cannot be named for legal reasons but is know by his cyber ID 'Akill'.

He was interviewed as part of an investigation involving the NZ Police, FBI and Dutch authorities. NZ police say Akill was later released without charge but remains part of their investigation.

It is alleged that Akill headed an elite 'botnet' group called "The A-Team" which was comprised of people from the US and abroad. The gang are thought to have used botnets to infiltrate and control around 1.3 million computers.

The hackers could then use the computers to steal credit card information and manipulate stock trades.

In a statement NZ police say Akill is alleged to have designed a virus that utilised encryption and was undetectable by anti-virus software. The head of the country's police e-crime unit, Martin Kleintjes, told reporters that Akill is "very bright and very skilled" and hires his services out to others.

It is thought the New Zealander was also a co-conspirator in a denial of service attack a Philadelphia university early last year. A FBI investigation into the attack on a University of Pennsylvania engineering school server led to the arrest of 21 year old Ryan Goldstein who was indicted earlier this year.

The FBI says an investigation launched in June into criminal use of botnets has uncovered more than $20 million in economic loss and more than one million "victimised computers" so far.

"Today, botnets are the weapon of choice of cyber criminals. They seek to conceal their criminal activities by using third party computers as vehicles for their crimes," says FBI director Robert Mueller.

Since the FBI launched "Operation Bot Roast" in June, eight individuals - including Goldstein - have been indicted, pleaded guilty or been sentenced for crimes related to botnet activity.

FBI assistant director James Finch, cyber division, says the public can play a part in thwarting botnet activity by maintaining strong computer security and updating anti-virus software, installing a firewall, using strong passwords etc.

"Without employing these safeguards, botnets, along with criminal and possibly terrorist activities, will continue to flourish," says Finch.