Australian police said Saturday they would investigate a listening device found hidden in a meeting room used by New Zealand's All Blacks rugby team at a Sydney hotel.
"We will be looking at all the avenues and what part of the legislation it comes under. In particular ... telecommunications offences and the Listening Devices Act," Superintendent Brad Hodder told reporters.
The All Blacks were to play Australia's Wallabies for the Bledisloe Cup on Saturday evening.
The bug was discovered embedded in a chair in a meeting room at Double Bay's Intercontinental on Monday, New Zealand Rugby Union chief executive Steve Tew said outside the hotel.
"There was an All Blacks team meeting there earlier in the week. If the device was working properly - and we don't know that for sure - then they would have overhead that," Tew told reporters.
"The hotel immediately launched an investigation, we have informed the Australian Rugby Union and jointly we have now decided to hand over the investigation to the Australian police," he said.
It was not clear why the case was not reported to the police until Saturday.
"We are taking this issue very seriously and given it will be a police matter, it would not be prudent to go into further details," Tew said.
According to the New Zealand Herald, the device was buried in the foam of a seat, which had been carefully cut and sewn or glued back together.
It was found after the team management asked their security detail to sweep the room for bugs.
Australian Rugby Union boss Bill Pulver denied that the device had anything to do with the Australian team.
"It is completely ludicrous. I just think it's a ludicrous concept that there are listening devices being placed in team rooms. I don't know how that could happen," he was quoted as saying by the Herald.
"We are going to focus on a game of rugby that we've got tonight and we will deal with this matter after the rugby."