Four people hospitalised as Australian police open fire on escaped psychiatric patient

Four people have been taken to hospital with gunshot wounds after Australian police opened fire on an escaped psychiatric patient armed with a knife near in crowded mall in Sydney's north on Thursday.

A confrontation erupted when police approached a 23-year-old man who was allegedly carrying a carving knife. Police subsequently opened fire when the man, who was known to police, allegedly lunged at one of the officers in the crowded market in Hornsby, northern Sydney, the New South Wales (NSW) state police Assistant Commissioner Denis Clifford told reporters at the scene on Thursday.

"He was wounded several times," Clifford said.

"Unfortunately some bystanders were also injured, with either bullet or fragment wounds."

It's believed the bystanders were three women, aged between 60 and 80 years old. All four have been transported to hospital and are in a stable condition, with the man under police guard.

Police had been searching for the man since Wednesday after he was reported missing from a nearby psychiatric facility.

Though its alarming bystanders were wounded when police fired at the man in a crowded location, the two officers made a decision in a "life-and-death situation," Clifford said.

"I wonder what may have happened had the police not intervened and stopped this person with a knife," he said.

A "critical incident investigation" has been launched, which will look into why potentially non-lethal methods, such as a Taser, were not used to subdue the man. Endit