The Education Review Office says most schools are using artificial intelligence but fear it is damaging children's critical thinking.

In a report out on Thursday, the office said generative AI is becoming part of everyday school life and teachers and principals want more formal guidance from the Education Ministry.

The report Ready or not: How are schools responding to Artificial Intelligence recommended development of a national AI in education framework and national policies on teacher and student use of the technology.

It said the review office found 40% of secondary students had misused artificial intelligence for their schoolwork though less than half that figure admitted to using it to cheat in assessments.

The report said AI was emerging as a key issue in education and more than 90% of New Zealand school principals and more than 80 percent of teachers used it.

Principals generally used it to ease their admin workload for drafting messages and summarising information while teachers used the technology to tailor resources and develop lessons.

"Across the schools we visited, AI was most often described as a practical tool that can support efficiency, reduce workload, and assist learning. Leaders and teachers generally see AI as a tool that should support, rather than replace, professional judgment," it said.

The report said half of teachers said AI made their job easier but they also worried that unplanned use of the technology was having a negative effect on students' critical thinking.

"More than half of teachers (57%) report that AI has had a negative effect on students' critical thinking," the report said, adding that the concern was highest among secondary teachers (72%).

It said students also recognised the risk.

"It gives you the answer, but you don't do any thinking for yourself," said one.

The report said some teachers refused to use the technology.

"We also heard from a small group of teachers who identify as 'conscientious objectors', choosing not to use AI on principled grounds. These teachers were particularly concerned about the example its use sets for students and its potential impact on creativity, independence, and development," it said.

Education Review Office (ERO) chief executive David Ferguson told RNZ he was surprised how widespread AI had become with most people in schools using it regularly.

"It's been one of the biggest game changers in the sector I think in the last few years... We're led to believe it changes quickly so we think it's really significant," he said.

Ferguson said schools' use of AI was positive.

"This is a big deal for schools in terms of keeping everybody safe, making sure they're maximising the potential in terms of using it. That's why we're suggesting that we think having a consistent deliberate, strategic framework for all schools, a centrally-provided one, would be a good idea," he said.

Ferguson said ERO's work had not revealed a digital divide based on schools socio-economic backgrounds.

"We didn't discern differences there in terms of equity or a digital divide. It was so widespread we thought, that it looks like it's being used far and wide," he said.

What students had to say about AI

Seventy-five percent of students reported using AI, mainly to find information and generate ideas.

The report said primary school teachers tended to manage student use of AI and it was more widespread in secondary schools.

"It's totally normalised, you don't really even think about using it," a secondary student told the report writers.

Another student described AI as a very good tool but said others over-used it.

"I use it to get inspiration for when I'm doing my work. But at the same time, I know students who use it as a crutch to do all their work for them," they said.

A primary school student said they used AI to correct their grammar and punctuation.

"I'll ask it to improve my spelling and paragraphs and my full stops, exclamation marks, and stuff like that. Sometimes, if I'm not sure how… I'll just go, 'could you improve this?'," they said.

The report said some students (38% of secondary students, 20% of primary and intermediate students) used AI in ways they knew they should not.

"Students told us they sometimes turn to AI to complete parts of tasks more quickly, particularly when work feels repetitive, when they believe they already understand the content, or when they are managing competing demands across subjects. The easy availability of AI tools, combined with lower levels of oversight than in assessment contexts, creates more opportunities for this type of use," it said.

"It's addictive, if you use it once then you just can't stop using it. I can think for myself, but if it's anything more in depth, then I have to use [AI] - I can't think that deep," a primary school pupil said.

However, fewer students reported using AI inappropriately for work that was assessed.

"Overall, relatively few students report knowingly using AI inappropriately for assessments, with 14% reporting that they have used AI in ways they know they should not for assessments or tests. Almost three-quarters (72%) say they have never done so. However, a further 14% are unsure whether their use is inappropriate," the report said.

The rate was highest in secondary schools, where 19% of students reported inappropriate use in assessments and a further 9%  unsure.

Even fewer students said they had been caught using AI when they should not by a teacher - just 5% of secondary students and seven percent of primary students.

The report said the ministry provided high-level guidance on the use of generative AI but most teachers (73%) had not seen it.

It said many schools did not have formal policies for AI use and teachers' rulings on student use of AI varied.

"Despite this, one expectation is consistently understood: AI should not be used for assessment unless explicitly permitted. Students generally recognise this boundary, and schools use a range of approaches to reinforce it," the report said.

The report recommended integrating AI into learning rather than creating a standalone AI subject for senior secondary school students as the government was last year considering.

The report was based on survey responses from 1587 students, 859 teachers, 472 school leaders, and 889 parents and whānau as well as interviews and focus groups and visits to eight schools.