Moerane said the apartheid-era intelligence report drew "flawed conclusions from incorrect facts".
One of Ngcuka's accusers before the Hefer Commission, former intelligence operative Mo Shaik, allegedly reconstructed the report recently.
He is said to have originally drawn it up in late 1989 or early 1990 as part of an African National Congress intelligence investigation.
Ngcuka's other accuser, former transport minister Mac Maharaj, told judge Joos Hefer that Shaik had showed the report to him at the time.
Shaik included the reconstructed report in a 160-page bundle of documents that was submitted to the commission over which Hefer presides to support his expected testimony this week.
Earlier yesterday, Maharaj admitted before Hefer that it was Shaik who gave the reconstructed report to journalist Ranjeni Munusamy.
She consequently wrote a newspaper article in which spying allegations against Ngcuka first surfaced.
This was the first time that one of Munusamy's sources had been revealed.
She earlier refused to testify before the Hefer Commission.
She maintained that confidential sources had threatened her if she should identify them publicly.
The reconstructed intelligence report is headed "The Activities of a Source within ANC Structures, Source: RS 452".
It claims to be based on information received by an ANC underground unit in South Africa from paid security police sources.
Yesterday, Moerane called incorrect two of the allegations contained in the report.
They were among the pieces of information used to draw the ultimate conclusion that Ngcuka was most probably a spy. The first piece of "proof" that Moerane disputed was that Ngcuka had attended a 1988 meeting of the National Association of Democratic Lawyers (Nadel).
A second disputed statement was that travel restrictions on Ngcuka were lifted in 1989 at the request of the erstwhile National Intelligence Service for him to attend talks with the ANC in Dakar.
Maharaj conceded that no such meeting took place in Dakar in 1989.
He further conceded that he was not 100 percent sure that Ngcuka had been an apartheid spy. This was why he had attempted to delve into Ngcuka's past since the commission started its inquiry into the spying allegations against him.
"There is never enough information until you have established a thing with 100% certainty," Maharaj explained.
He nevertheless believed in the correctness of the reconstructed ANC report's conclusion, Maharaj said. When asked about his own conclusion from the latest investigation into Ngcuka's apartheid-era activities, Maharaj replied, "the case keeps growing more curious".
Earlier on Monday, Maharaj reacted sharply to a perceived suggestion by Advocate Norman Arendse, counsel for Justice Minister Penuell Maduna, that he was making testimony up.
"I reject that with contempt, the suggestion that I am making it up!" Maharaj said.
"I am not a person who cooks up things, and I am not cooking as I sit here," he added.
Meanwhile, the marathon cross-examination of Maharaj before the Hefer Commission will continue today.
Moerane will continue to question Maharaj about his allegations that Ngcuka abused his power.
Moerane is also expected to continue with cross-examination about a reconstructed apartheid-era spy report, which concluded that Ngcuka was "most probably" a spy.
Moerane described this report yesterday as factually flawed.
Maharaj is one of Ngcuka's main accusers.
The other main accuser, former intelligence operative Mo Shaik, will testify after Maharaj. He may take the stand by this afternoon. – Sapa.