Victorian police officer Tim Argall has admitted he had an "episode of physical intimacy" with Nicola Gobbo, the former gangland lawyer and police informer known as Lawyer X.

Key points: Tim Argall is the first police officer to be directly questioned about their personal relationship with Lawyer X

Tim Argall is the first police officer to be directly questioned about their personal relationship with Lawyer X He admitted he had a sexual relationship once with Nicola Gobbo in 1997

He admitted he had a sexual relationship once with Nicola Gobbo in 1997 The detective also said he once took her to a police ball and used to meet her for drinks after work

The details emerged as the Royal Commission into the Management of Police Informants probed the relationships Ms Gobbo had with police officers and whether professional dealings were compromised.

Detective Senior Sergeant Argall is the first police officer to be directly questioned about his personal relationship with Ms Gobbo.

He said the sexual encounter occurred two years after he signed her up as a police source.

Only one sexual encounter

Tim Argall said he would drink socially with Ms Gobbo and once took her to a police ball. ( AAP: Ellen Smith )

In awkward questioning, Senior Sergeant Argall was asked if he had had a sexual relationship with Ms Gobbo after she had been used as a police informer.

"There was an occasion in 1997 when you had an episode of physical intimacy, if we could put it that way?" counsel assisting Chris Winneke said.

"Yes," Senior Sergeant Argall replied.

He said it happened only once but they continued to "meet up and interact".

Senior Sergeant Argall said he first met Ms Gobbo, who was also known as Informer 3838, in 1995.

In 1995 she was a law student. She later rose to become a sought-after criminal barrister.

After Ms Gobbo became a lawyer, Senior Sergeant Argall said he would drink socially with her and meet for lunch or dinner while she was working at the Melbourne Magistrates' Court.

At times they would meet at each other's houses.

Sometimes they were joined by former drug detective Paul Dale, who has also claimed to have had a sexual relationship with Ms Gobbo.

Senior Sergeant Argall said he invited Ms Gobbo to a police ball while he was working for the homicide squad in 2002, and after that "she would invite herself".

By then she was a well-known barrister who knew a lot of police officers.

Quizzed about whether he investigated cases involving her clients, Senior Sergeant Argall said he could not be sure and only remembered one possible case.

He was posted to the Lorimer Taskforce in 1998, which was investigating the murder of police officers Gary Silk and Rodney Miller.

Under questioning on Monday, he said he did not know Ms Gobbo had represented murderer Bandali Debs at a court hearing.

Senior Sergeant Argall said he had also asked Ms Gobbo for legal advice in 2003 due to his association with Mr Dale, who was charged over the burglary of a drug house.

He told the commission Ms Gobbo was keen to help police, but would get far too ahead of herself.

"When it came to using covert operatives, she was excited about that," he said.

At one point he said, she "plucked a name" that an undercover operative should use, and police had to run with it.

But Senior Sergeant Argall said at the time he didn't agree she was a "loose cannon" — as described by Assistant Commissioner Jack Blayney, the man in charge of the police undercover unit at the time.

The commission heard Ms Gobbo's second stint as a police informer in 1999 came after a meeting a year earlier, where concerns had already been raised about her suitability due to her "inappropriate relationships with some officers" and her desire to help police being "too overt".

Sorry, this video has expired Why you should care about the Lawyer X affair ( James Oaten )

Police chief's adviser knew of Gobbo's role

Chief Commissioner Graham Ashton's current chief of staff, Brett Curran, was briefed about the use of Ms Gobbo as an informer in 1999.

Mr Curran was then in charge of the asset recovery squad, when the barrister offered to tell all about her former employer defrauding Legal Aid.

He also worked as Premier Daniel Andrews's chief of staff when he was in opposition.

Giving evidence at the royal commission, Detective Inspector Gavan Segrave detailed his involvement with recruiting Ms Gobbo in 1999, her second stint as an informer.

Inspector Segrave said he knew she was a barrister and would have spoken to his boss at the time, Mr Curran, before he officially signed her up, but he could not recall exactly what he told him.

"I would expect that the conversation would have been closely contained," he told the hearing.

It led to Operation Ramsden, but no arrests or charges were made and Ms Gobbo's registration as an informer was deactivated in 2000.