Police today said it was a miracle no bystanders were injured when a lone gunman opened fire on officers, prompting a shoot-out just metres from a busy Sydney shopping strip.
The unnamed man's life is tonight hanging in the balance after he allegedly ended the gun fight by firing a bullet into his own skull.
Police said two officers were buying lunch in Eastwood's shopping district, in the city's north-west, when they responded to reports of a man acting suspiciously near the Commonwealth Bank about 1.30pm (AEDT).
The officers chased the man into nearby Hillview Laneway, where he allegedly drew a pistol and shot at them several times, prompting them to return fire.
Police at the scene said the man then shot himself in the head.
He was taken to Royal North Shore Hospital where he remains in a critical condition.
However, Assistant Commissioner Denis (Denis) Clifford later refused to confirm who had shot the man, saying there would be an independent investigation into the matter.
"That will be part of the investigation, to determine exactly how the person sustained the gunshot wound," Mr Clifford said.
Mr Clifford said the gunman may have been scoping out the bank for a potential robbery.
He praised the actions of the two "brave" officers who took him on with little cover in the laneway.
"It's in some ways a miracle that no one (else) was injured," Mr Clifford told reporters.
One witness, Dave Stirling, who was refurbishing a fruit shop that opens onto the alleyway, said he had heard a banging sound on the shop's roller door.
"So I went outside to have a look and I saw the police shooting down into a building off the alleyway," Mr Stirling told Macquarie Radio.
"It was quite unnerving ... it (went on for) quite a few minutes.
"The banging on the roller door was actually the offender shooting at police ... I couldn't believe I was standing probably within a metre of (the) bullets."
The incident shocked shop owners on the busy shopping strip.
"I was standing by my shop collecting money when I heard the gunfire," said the owner of a nearby chicken shop.
"I thought it was people shooting birds at first."
