WELLINGTON, NEW ZEALAND - A New Zealand man was Friday found not guilty of murdering five members of his family in a retrial described by his lawyer as the most extraordinary case in the country's history.

David Bain, 37, was in tears after being found not guilty of the 1994 killings of his parents, two sisters and a brother in their home in the southern city of Dunedin in a case which has gripped New Zealand.

Bain spent 12 years in prison after first being found guilty in 1995 of shooting his family with a rifle, but he was released in 2007 after the Privy Council in London said there had been a substantial miscarriage of justice.

The defence had argued the family was killed by David's father Robin Bain, who they say turned the rifle on himself after killing the rest of the family while David was out delivering newspapers.

During the trial witnesses said David's sister Laniet had told them she had been having an incestuous relationship with her father and was preparing to tell the rest of the family.

The prosecution said the fact the gun belonged to David, as did a pair of bloodstained gloves found at the house, along with other forensic evidence meant the quietly-spoken David must be the killer.

An emotional and exhausted Bain found it difficult to speak to the media and supporters after the verdict, but was quick to praise former All Black Joe Karam who spent millions of dollars of his own money in fighting to free him.

'All I can say is that without Joe and his solid strength, without the love of the people that have supported me since day one, I wouldn't have made it through this far,' Bain told cheering supporters.

Later, he admitted to being 'pretty shattered'.

'It was a huge release, in some respects it took a huge weight off my shoulders.'

Bain was acquitted after the jury deliberated for nearly six hours following the 57 day retrial.

The head of Bain's defence team, Michael Reed, had described the Bain saga as 'undoubtedly the most extraordinary case in New Zealand's history'.

On Friday he said Bain should never have needed to face a retrial after his release in 2007.

'This has been a ridiculously expensive trial that should never have been brought,' said Mr Reed.

'Millions have been spent, millions on legal aid - it's a tragedy really.'