Police are investigating the actions of some of their own after a botched undercover operation led to charges against 21 gang members being dropped.

Last week, Justice Simon France issued a stay of proceedings on drugs and criminal group charges against the members of the Red Devils Motorcycle Club, after police were revealed to have brought a fake prosecution against an undercover officer posing as a bikie.

Police used a fake warrant to search the undercover officer's lock-up, and then laid false charges against the officer in an attempt to give him more credibility with the motorcycle club he was infiltrating.

Police have admitted an internal investigation into the actions of the police officers involved is under way, the New Zealand Herald reports.

Justice Forrest Miller had earlier revealed in a decision denying media full access to the court file that police were conducting an internal investigation.

A police spokesman has now confirmed the investigation, saying it would "establish any issues of a criminal or disciplinary nature".

"Police are absolutely committed to ensuring the undercover programme operates in a way which puts offenders before the courts while operating within the law."

The investigation ran alongside a review of the undercover programme "to ensure this situation does not happen again," the spokesman said.