One dead as gunman opens fire at rush-hour commuters in Australia

Screams rang out among early morning office workers as the gunman blasted away at people making their way to work.

The gunman managed to run away and hide as dozens of police swept on the area at the junction of Flinders Lane and William Street in the heart of Australia's second largest city.

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Police said the shooting did not appear to be a random act, and that it was believed a woman who was one of the victims knew the gunman.

The other two victims - including the one who died - were male bystanders who came to the aid of the woman during an altercation with a man who pulled out a gun, witnesses said.

Inspector Steve Martin said the woman and one of the men who went to assist were rushed to hospital in critical condition with gunshot wounds to their chests. The third victim died at the scene, he said.

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As helicopters with armed police on board scoured the skies searching the streets below police inspector Glen Weir said: "At least one person is dead and two others have been taken to hospital.

"We are asking people over the radio and television not to panic. But it is understandable that everyone will be on edge while this man is still on the loose."

The centre of the city was on lock down as those already at their shops and offices were told to remain indoors.

Shop owner Hened Mouwad said she heard at least six shots ringing out. "It was about 8.20am (11.20pm London time) when I heard the shots.

"People were screaming and I'd been told by someone rushing by the shop that there were at least three bodies lying in the street."

Ambulance spokesman James Howe said two people had been rushed to nearby hospitals with gunshot wounds but it was too early to confirm their conditions.

Armed police rushed to the scene as witnesses telephoned the emergency services on their mobile phones.

Every street in the vicinity was blocked off and office workers were hurriedly shepherded away. But there was no immediate sign of the gunman and his identity remained unknown.

A detective said: "While this man is on the loose we have to take every precaution. It's impossible to say at this stage whether this incident is an isolated matter or whether this man intends to strike again.

"It's a very worrying situation for everybody and until he is caught we will remain on the highest alert."