A New Zealand court on Friday overturned an order that US authorities must disclose all of the evidence they have against Kim Dotcom if they want to extradite him for alleged online piracy.

A court made the ruling last year after Dotcom's legal team argued they could not effectively fight the extradition battle without full disclosure of evidence held on the founder of the now-defunct Megaupload file-sharing website.

Lawyers representing the United States successfully challenged the ruling, arguing in the Court of Appeal that the evidence could involve billions of emails and would delay the extradition hearing.

The three judges on the appeals court bench quashed the order and said an accurate summary of the evidence would suffice at the hearing, which has already been delayed twice and is now expected to proceed in August.

"Obviously it's disappointing, there's some major legal arguments that we have to work through here," one of Dotcom's lawyers, Willie Akel, told Radio New Zealand.

Dotcom indicated on Twitter that he would launch another appeal against the decision.

"The fight goes on. Next is the Supreme Court of New Zealand," he tweeted.

It is the first reversal after a string of legal wins for Dotcom, who last year gained a court ruling that the search warrants police used when they raided his Auckland mansion as part of the operation against Megaupload were illegal.

The 39-year-old's file-sharing empire had 50 million daily visitors and accounted for four percent of all Internet traffic at its peak but was shut down after the raid in January last year.

Dotcom is free on bail and denies US allegations the Megaupload sites netted more than $175 million in criminal proceeds and cost copyright owners more than $500 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.

Dotcom, a German national who changed his name from Kim Schmitz, launched a successor to Megaupload, called Mega, in January this year.