Police gather near the scene of a hostage situation at a cafe in Rye. Credit:Jason Taylor He said the man had "peacefully surrendered" about 3pm. "In these type of instances time is always your friend. And the end result I think has shown the value of negotiations." Superintendent Weir said a shot had been fired in the early stages of the siege, which began about 8am on Saturday, but there was no other violence. The 45-year-old woman was being treated at the scene by paramedics.

Police have swooped on the shop opposite the foreshore. Credit:Paul Jeffers The cafe where the siege took place was once known as the Rye Cafe and is now called The Little Beach Cafe. A large armoured vehicle arrived at the scene about 11.45am with several heavily armed police officers. Surrounding shops have been evacuated. Credit:Paul Jeffers The woman taken hostage has owned the cafe for about eight months according to locals, who characterised it as a cheap and cheerful place which sold coffee and pies from a bain marie.

A worker at nearby cafe Freaky Tiki was first alerted to the hostage situation when he saw workers fleeing from Bakers Delight, which is right next to the cafe. The gunman has been in a stand-off with police for more than three hours. Credit:Paul Jeffers The cafe wasn't open when the hostage taker entered it, according to workers at Baker's Delight. Freaky Tiki owner Anton Vigenser said he saw Bakers Delight staff exit their back door and go across the road about 7.45am. Traffic has been diverted away from the area. Credit:Ward Young

"I was told that the cafe next to them, someone had gone in there with a pistol or a gun. "So, I popped round the other side to make sure everything was all right round there and the locals and staff just made sure that everyone stayed away until the cops arrived. A police officer outside the scene of the siege. Credit:Paul Jeffers "I really hope that whatever this guy is feeling at the moment, he can get through it and it can all end. "No one expects this to happen. It might be a case of mental illness or something like that.

"It's definitely unusual. It's shocking." 'They'd all sit up front together' Mr Vigenser said he spoke to the cafe owner on a daily basis and had often seen the suspected gunman. "They used to be together at the shop in the morning occasionally," he said. "He had a big beautiful dog and they'd all sit up front together.

"It's so unusual that this would escalate to this. It's so unexpected." Locals have told Fairfax Media the man was a regular visitor to the cafe owned by his ex-partner. They had regularly argued in public at the venue in recent months, with the arguments escalating, according to locals. According to police, the relationship ended about two or three weeks ago. The man apparently went into the cafe on Saturday morning before witnesses heard yelling and shouting. Eyewitnesses said the gunman quickly pulled down the blinds in the cafe.

Victoria Police spokeswoman Julie-Anne Newman said police were called to the cafe on Saturday morning, following reports that a man with a firearm had entered the shop about 7.45am. The man has been charged with two counts of unlawful imprisonment and firearm offences. He has been remanded to appear in Frankston Magistrates Court on Monday.

Started as an ordinary day Ward Young, who was staying overnight in Rye, said was going for his morning walk when he came across the siege. Mr Young said the situation had turned Point Nepean Road into an "eerie ghost town" after police cordoned off the area within a 120 metre-radius from Ozone Street to Hygeia Street. "Police have blocked off the main road and the footpath Bay Trail, that's on the other side of the road, adjacent to the beach," Mr Young said. "They are making people walk along the beach."

When news of the siege broke, he said a lot of people had gathered at a café about 200 metres down the road. A local, Cheryl, told Fairfax Media she was in a nearby Woolworths for her morning shopping run at 7.30am when she was told at the checkout that the store was in lock-down. Cheryl said 20 minutes later she and other shoppers were rushed out of the shop by police, leaving filled trolleys behind. Police raced to the scene in the beachside town, lights and sirens blaring down the highway, with heavily armed special operations group and dog squad both in attendance. Rye Produce and Nursery owner Noel Tregaskis said he was holed up in his shop which was about 150 metres away near Hygeia Street and Point Nepean Street.

"There is no car access anywhere near us, they are making people do U-turn and head back down the highway," he said. "The only way anyone can go anywhere is walk right across the road and walk along the actual sand on the beach. "They are not letting anyone use the footpath, bike paths." Mr Tregaskis said he was marooned in his shop and couldn't get home. "I have got my truck at the back of the shop, I am not allowed to drop it," he said.

"We have got deliveries to do this afternoon, I don't know if I would be able to do it."