Police did not storm the Lindt Cafe when shooting first started during the Sydney siege because officers thought the gunman was aiming above the heads of hostages, an inquest has heard.

Assistant New South Wales Police Commissioner Mark Jenkins was in charge of the Police Operations Centre towards the end of the 17-hour siege in December 2014.

He told the inquest he was told by Forward Command Centre colleagues that gunman Man Haron Monis fired a shot in the air and possibly over the heads of hostages after a group of them escaped about 2:00am.

He said he heard "conjecture" that the first shot was fired at police.

"I also heard that the shot was high," he said.

But police waited until Monis fired again and fatally shot cafe manager Tori Johnson before entering the building.

They killed Monis and hostage Katrina Dawson died after being hit by police shrapnel.

Mr Jenkins, whose shift on the night of the 2014 siege started at 10:00pm, said ultimately it was not his job to decide when police should enter the cafe.

He said that decision would have been made by the Forward Command Centre and that his role in the Police Command Centre - was dealing with "large strategic issues".

"I can't be as a Police Commander - all knowing and have every bit of information," the Assistant Commissioner said.

Mr Jenkins told the inquest the "trigger" for police to storm the cafe was the death or serious injury or imminent death or serious injury to a hostage.

Police and a robot walk in Martin Place at the end of the siege. ( Reuters: Jason Reed )

He said the term "imminent threat" was debatable and the information he was given was that tactical advisors did not think an "Emergency Action" plan was needed after the first shot because it was in the air.

But an Emergency Action was declared after Mr Johnson was shot dead.

Assistant Commissioner Jenkins has defended the "contain and negotiate" tactic police used for most of the siege - saying he thought it would resolve the situation.

The inquest heard police were prepared to grant Monis his earlier request of having the lights turned out in Martin Place before the shooting started.

Mr Jenkins said they wanted all female hostages to be released in exchange.

The witness said he did not recall receiving any written updates from police negotiators during the siege - only verbal ones.

He said he had read a UK review team report on how NSW police handled the siege.

When asked by Counsel Assisting Jeremy Gormly SC if he accepted that it was difficult to see a "discernible police position" on negotiating with the gunman, Mr Jenkins replied: "No, I don't" .

The inquest continues.