Police danced and mingled with swingers at a Melbourne nightclub in the hours before officers shot two people at the venue, leaked security footage shows.

Dale Ewins, 35, and Zita Sukys, 37, are suing the state of Victoria after being shot at the swingers costume party at the King Street club on July 8.

They were shot about 3:00am in an upstairs section of the club after police received reports a man was armed with a gun at the Inflation Nightclub, during what was described as an "erotic fancy ball".

The vision from the night shows two male police officers in the downstairs area mingling with scantily-clad partygoers, who hug and press up against them.

The two officers do not appear to attempt to separate themselves from the women.

One officer is seen in close proximity to a woman in fancy dress for 90 seconds before she lets go of him, and another woman wraps her arms around him.

According to the camera time stamp, police officers were at the venue for 90 minutes before the shooting.

They were surrounded by half-naked patrons who paid them little attention.

It is unclear whether the police were still at the venue at the time of the shooting.

Dale Ewins and Zita Sukys were hospitalised after being shot in the chest and leg. ( Facebook )

A source has told the ABC police often did walkthroughs at the nightclub, but they were usually a couple of minutes and then officers left.

On this night the source said police "were there for a notably longer time".

"They weren't patrolling they stood there enjoying themselves," the source said.

The source said the vision showed there was no drama, everyone was relaxed and the man with the toy gun had been at the club since 11:50pm that night.

The day after the police shooting, Superintendent Lisa Hardeman said venue security was told earlier in the night the gun was fake, but the "firearm" was levelled at police, prompting their response.

In court documents, Mr Ewins and Ms Sukys allege they were surrounded by 10 members of the Critical Incident Response Team, before Ms Sukys was shot by one or more of the officers.

It is alleged Mr Ewins was also tasered, punched in the face, forced to the ground and handcuffed.

Nightclub owner Martha Tsamis has previously said police "overreacted" to the situation, and the man only had a toy gun which nightclub security had informed police about.

She also contradicted the police account that the man aimed the gun at officers, and said he was "in a compromising position with his female partner".

The owner of Inflation Nightclub says police "overreacted" to the situation. ( ABC News: Patrick Rocca )

In a statement, Victoria Police said all police movements on the night of the shooting would be investigated by its professional standards command.

"Police members are expected to attend licensed venues and are regularly approached by patrons who engage them in conversation," a spokeswoman said.

"Police are expected, at all times, to conduct themselves professionally.

"As the investigation is ongoing it would be inappropriate to comment further."