At 2pm on 14 December 2002, Helen Steel, a well-known leftwing campaigner, and her parents landed at Auckland airport for a family holiday. It had been a tiring journey, so they were irritated when they were delayed leaving the airport for an hour.

What they did not know until recently is the reason for that delay. Their arrival had triggered a secret warning on Steel that had been put in place by police three weeks earlier. It prompted customs to carry out a discreet search of her luggage.

Steel’s sister collected the family and drove them to her home 90 minutes away. Again, none of them knew surveillance officers employed by New Zealand police were tailing them.

Nor did they know that over the next few weeks, police officers tracked their movements and took photographs of them. One picture was of them leaving her sister’s home.

Details of this extraordinary operation came in yet another damning disclosure to the spycops public inquiry, which is examining the conduct of undercover police officers who spied on more than 1,000 political groups between 1968 and at least 2010.

The inquiry has heard in recent weeks how senior Scotland Yard officers arranged for the police force of a country 11,000 miles away to covertly monitor Steel on two of her trips there as part of a calculated plan to protect a secret.

They feared that Steel was about to expose one of their undercover officers. The spy, John Dines, had had a sexual relationship with Steel for two years without disclosing his real identity to her. When he mysteriously vanished from her life, she set about tracking him down.

As well as the surveillance, the senior officers authorised the expenditure of £2.5m of public funds to relocate Dines to ensure that Steel did not find him. This included helping him buy a new house.

On Friday, Steel, giving evidence to the inquiry, said the surveillance and use of taxpayers’ money was an abuse of state powers to prevent her discovering how a police officer had “deceived and sexually exploited” her.

She was “really angry” that the Metropolitan police had put her and her family under surveillance, adding the police also wanted to protect an “illegitimate and undemocratic” operation, in which undercover officers such as Dines spied on tens of thousands of political campaigners across four decades.

On Tuesday, Paul Condon, the former Met commissioner, admitted at the inquiry that Scotland Yard had failed to control the officers and their managers who committed “horrendous abuses”.

These included monitoring grieving families such as the parents of murdered teenager Stephen Lawrence, who were campaigning about police wrongdoing, stealing the identities of dead children, and lying in court.

When Dines started the relationship with Steel in 1990, she believed she had fallen in love with an ideal man in what felt like an “idyllic” relationship. He told her he wanted to have six children and spend the rest of his life with her.

But in 1992, he disappeared from her life after claiming that he was having a mental breakdown. It was a lie to enable him to end his deployment.

Steel has described how Dines had subjected her to a “sadistic and callous psychological torture over a prolonged period”. For six months, he had given her contradictory signals – repeatedly going missing, claiming that he could not handle their relationship and life, before returning and proclaiming his love for her.

After he finally disappeared, Steel was devastated and also fearful that her missing partner might have been suicidal. She started to investigate who he really was as “none of it made any sense”.

It took Steel nearly two decades to establish, by fitting together disparate clues and visiting many archives, that he had been an undercover spy.

Documents before the inquiry now show that, while Steel was trying to trace Dines, Scotland Yard was secretly tracking her progress, logging, for example, how she had visited people who turned out to his relatives and who she was phoning.

At one point, in 1995, police recorded that “an examination of telephone calls from Steel’s home also shows her to have been in contact” with the chambers of Keir Starmer, then a barrister supporting progressive causes.

He was giving her legal advice as she had become a defendant in the celebrated McLibel case. In the longest trial in English history, she and another campaigner were sued by the fast food chain, McDonald’s, in a David and Goliath battle.

The inquiry has previously heard how Dines spied on Starmer and accessed the confidential details of his legal advice. In December 2002, Steel flew to New Zealand with her parents to visit her sister and friends for about two months.

At the behest of Scotland Yard, New Zealand police put them under surveillance and reported back. One police report set out the measures that would be put in place to “monitor Steel’s movements whilst in New Zealand … Thus far Steel has done little other than local shopping with her sister.” It added “urgent inquiries are in place to fully identify” her sister and family.

Steel said that, although it was not the primary purpose of her visit, she also contacted people she believed could have been relatives of her former boyfriend to see if they would tell her where he now was.

As part of his fake identity while he worked undercover, Dines had said he had previously lived in New Zealand for part of his life.

What Steel did not know at the time was that Dines was nearby – he had moved to New Zealand in 1995 after quitting the Metropolitan police and was working as a barrister in Auckland.

Fearing that she would locate Dines, the senior police officers agreed to fund the costs of moving him and his family to Australia quickly.

The £2.5m bill included the cost of subsidising the purchase of a house in Sydney, which was four times more expensive than his New Zealand home, and compensating him for his lost income as a barrister.

The senior officers justified the expenditure on the grounds that Steel posed a threat to Dines. She rejected this claim as “malicious lies”, adding that the real reason was to protect Dines from bad publicity.

The officers claim they did not know that Dines had had a sexual relationship with Steel, and did not question why she was so intent on finding him. It is a claim that has been dismissed as implausible by campaigners and lawyers at the inquiry, who point out that the undercover officers routinely formed sexual relationships with women they were spying on.