News Service from House Harris

NSW: Siege on NSW mid-north coast ends peacefully

SYDNEY, Dec 31 AAP - A long siege at a NSW mid-north coast property has ended peacefully, with a gunman surrendering to police and handing over his last hostage, an eight-year-old boy.

The siege in the coastal hamlet of Stuarts Point lasted more than 12 hours, with the 41-year-old holding five people hostage after a police car chase early on Wednesday.

Pursued by police, the gunman veered into the Stuarts Point Road property north of Kempsey around 5.30am (AEDT), shooting at officers before barricading himself inside the house.

Dozens of police swarmed around the house during the tense operation, which saw officers forming a 2km exclusion zone around the property.

Between 8.45am and 11.50am (AEDT), police negotiators secured the release of four hostages, but the stalemate with the gunman stretched late into the afternoon.

Just after 6pm he surrendered to officers, and handed over the eight-year-old boy.

No one was injured during the siege, police said.

"The incident at Stuarts Point has been resolved without incident and peacefully," a police spokeswoman said.

"A 41-year-old male is currently in custody while an eight-year-old male has been released safe and well."

Police have not released the identities of the hostages, or the gunman, but neighbours said a couple and their two children lived in the home.

Police would not disclose the relationship between the man and the eight-year-old boy, nor if the gunman knew the occupants of the Stuarts Point property.

The siege shocked the small coastal town, with locals woken by police sirens just after 5.30am, followed by three gunshots.

One neighbour, Nathan Neilly, told the Ten Network that "apparently two coppers got out of the car and he started firing shots at them".

Jennifer Elliott, who lives about four properties down from the house, said she and her husband were woken by blaring sirens.

"We awoke this morning to the siren and from our bedroom we can see the road and we sat up in bed waiting to see if it was an ambulance or the police," she told AAP.

"Then it stopped, and the next minute we heard three gunshots."

Ms Elliott said the properties along Stuarts Point Rd were small farms of less than three hectares, growing produce such as bananas, avocados, macadamias and mangoes.

She said the family had moved to the area in the past five years, but she did not know them well.

"We don't even know whether the person (the hostage taker) belongs to that house, because he was in a police chase at the time, whether he just thought: `I'll call in here'," she said.

Richard Livesey, a neighbour living just 100 metres away, said residents were asked to stay inside their homes during the early hours of the siege.

He said police involved in the operation were "heavily armed, some in normal police uniform with flak jackets".