TWO people, including a man wielding what is believed to be a toy gun, have been shot by police at a fancy dress “swingers party” in Melbourne in the early hours of this morning.

Police say they received multiple reports that a man was armed with a gun in an upstairs room at the Inflation nightclub in the CBD shortly before 3am.

Reports the weapon was actually a toy gun are being investigated by police. The man was dressed as the Joker from the Batman films, and the venue’s staff said a toy gun was part of his costume.

Around 100 people were at the venue but only ten on the first floor where the 35-year-old man was reportedly located.

Police fired at the man after he allegedly pulled out a gun, hitting him in the torso.

The Age reported that the man was Tasered by police after being shot.

Superintendent Lisa Hardeman said local police arrived first but members of the Critical Incident Response team formulated a complex plan.

“Police called on the male, the male took the firearm from his pants and aimed it at police,” she said.

“A number of shots were fired.

“A number of police options were used after he was shot.”

A woman - who was apparently dressed as the character Harley Quinn, a paramour of The Joker in the comics - also sustained a gunshot wound to the leg and has been taken to hospital with non-life threatening injuries.

The Herald Sun reported the man and the woman are known to each other.

A witness told The Age that the couple were engaged in a sexual act in front of other party-goers when about 40 police from the heavily-armed Critical Incident Response Team stormed into the club.

Bar staff emerged from the venue at 7.15am and said: “Two innocent people were shot, he had a toy gun which he declared to security.”

“The male with a toy gun was dressed as a Joker,” the bar staff told the Herald Sun .

A Facebook user who claimed to work at the venue and was there last night posted about the incident.

“The event was a fancy dress party and the person who was shot, declared that the gun he had on his person was fake and part of his costume,” she posted.

“It was made from plastic.

“This man and an innocent bystander were shot over a plastic gun at an adult fancy dress party.”

Last night’s event at Inflation nightclub was believed to be a Saints and Sinners Ball which the website says is “for Australian swingers and those who are just curious”.

The event encourages erotic outfits and describes itself as having: “A well-earned reputation as Australia’s, if not the world’s, raunchiest party.”

“Saints & Sinners invites fun couples who agree to the terms and conditions of an adult event, keeping in mind many of our guests are sexually uninhibited,” the website states.

“This includes dressing in erotic outfits (theme) and accepting what happens on the night as adult fun!”

The man was taken to the Royal Melbourne Hospital under police guard.

Police said he remained in a serious condition with non-life threatening injuries.

Any witnesses or anyone with information is urged to contact Crime Stoppers on 1800 333 000 or submit a confidential report at www.crimestoppersvic.com.au.

- With APP and the Herald Sun.