The Lawyer X royal commission has heard police lied to gangland lawyer Nicola Gobbo in one of the first conversations she had as an informer.

Key points: A police handler told Ms Gobbo he was not recording in 2005, but the tapes were played on Wednesday

A police handler told Ms Gobbo he was not recording in 2005, but the tapes were played on Wednesday He earlier said he considered arresting Ms Gobbo when she defied police orders to keep representing a drug trafficker

He earlier said he considered arresting Ms Gobbo when she defied police orders to keep representing a drug trafficker Separately, the commissioner accused police of deliberately withholding documents from the commission

The Royal Commission into Management of Police Informants heard evidence from a member of a secretive police squad, the Source Development Unit, that dealt with high-risk informers like Ms Gobbo.

The commission was played audio tapes of Ms Gobbo talking to police handlers in September 2005, at the start of what became a three-a-half-year period of Ms Gobbo informing on her gangland clients to police.

One handler, known by the pseudonym Sandy White, testified at the royal commission on Wednesday, where it was also revealed he first contemplated recruiting Ms Gobbo as an informer when she was ill in hospital after suffering a stroke.

In one of the tapes played to the commission, Ms Gobbo asks whether the conversation is being recorded.

Nicola Gobbo: Before we start, before you say anything else, is this being recorded? Officer 'Sandy White': It's not, but I'm about to start a recorder. Nicola Gobbo: Well, I'm very concerned about that but — Sandy White: Yeah. No, you tell me — before I start then, you tell me what your concerns are and I'll see if I can allay 'em for you. Nicola Gobbo: Okay. Once something's recorded, it's there. Sandy White: Mm. Nicola Gobbo: It's somewhere. Sandy White: Yep.

Ms Gobbo represented a string of high-profile underworld clients. ( ABC News )

It emerged later she was concerned that if certain people found out she was informing on clients she would be killed.

Sandy White: Well, let me just put this to you, are you going to be inhibited by what you say if I run a tape-recorder? Nicola Gobbo: Yes.

As the conversation goes on Ms Gobbo is again assured the chat isn't being recorded but the tape is still rolling.

Sandy White: Just with the tape issue, we'll deal with that. We will tape-record conversations with you in the future if we're going to go down this track. Nicola Gobbo: Yep. Sandy White: I — I give you an undertaking today while we just explore each other, but I'm not going to put that tape recorder down and start tape-recording you. But it's as much for our protection as anyone else's. Nicola Gobbo: Yep, I understand that, yep.

It's the first time tape recordings of Ms Gobbo's extensive conversations with her handlers have been played to the commission.

It gives an insight into the complex relationship between Ms Gobbo and her handlers.

Gobbo defied police to represent drug trafficker, commission hears

During his testimony, Mr White said he had considered arresting Ms Gobbo when she defied police orders to stop representing one of her clients.

He told the hearing that in the mid-2000s, Ms Gobbo provided information that led to the arrest of a drug trafficker who was also her client.

Recognising a clear conflict of interest, Ms Gobbo's police handlers ordered her to stop acting for the man.

Under questioning from counsel assisting the commission, Chris Winneke QC, Mr White said he considered arresting Ms Gobbo because by defying the order she might have been perverting the course of justice.

"It did cross my mind that [an arrest] might have been an option," Mr White said.

Ultimately he did not go ahead with the arrest because he thought there were insufficient grounds.

"The obvious thing to do would be to seek advice from a senior officer," Mr Winneke said.

"Yes," Mr White said.

"Did you speak to any officers?" Mr Winneke asked.

"I can't recall," Mr White said.

The commission also heard Victoria Police saw an opportunity to recruit Ms Gobbo as an informer when she was ill in hospital after suffering a stroke.

Mr White said in 2004 he had identified that Ms Gobbo could provide valuable information because of her extensive list of contacts in the criminal underworld.

"When she had a stroke I thought she might have been vulnerable to an approach by police," he told the commission.

Ms Gobbo was registered as a police informer the following year and gave information until 2009 in an arrangement the High Court has described as "reprehensible".

Commissioner accuses police of withholding information

Commissioner Margaret McMurdo said metadata showed police had held onto documents for months. ( Supplied: Royal Commission into the Management of Police Informants )

Earlier on Wednesday the commissioner, Margaret McMurdo, accused Victoria Police of deliberately withholding documents.

She said metadata underlying some of the documents showed they had been discovered by Victoria Police many months ago but had only been handed over this week.

"Victoria Police was clearly aware of these documents at the time [but] only produces them on the weekend," she said.

Ms McMurdo said the failure of Victoria Police to quickly hand over relevant documents is making the work of the commission extremely difficult.

"Could I remind Victoria Police yet again of their continuing obligation to disclose relevant information in a timely manner," she said.