A New South Wales Liberal Party meeting has seen one man hospitalised after a brawl broke out at a cafe in Sydney's south.

A senior Liberal Party source said the clash was "unprecedented" and a "tragic internal shit fight brought about by the pettiness of politics".

Numerous people were seen running from Naji's Cafe on Firth Street in Arncliffe after police were called just before 7:00pm.

A NSW Liberal Party member, who said he was there, told the ABC another member tried to branch stack the meeting with outsiders.

Police have confirmed the cafe is owned by Liberal councillor Michael Nagi. He is one of three councillors who represent the Mascot ward on Bayside Council.

The function turned ugly when members started fighting over the body in charge of selecting councillors.

Police have confirmed Liberal councillor Michael Nagi owns the Arncliffe cafe where the brawl happened. ( Bayside Council )

The eyewitness, who does not want to be identified for fear of reprisals, said the outsiders were from Sydney's south-west.

"[They] purposefully tried to branch stack us with people from the Bankstown-Canterbury region," he said.

"This seemed to be a real focus on race, religion."

However, Councillor Nagi said the brawl had nothing to do with religion or race.

"Do not play that card. It has nothing to do with religion or race," he said.

"Just let the investigation take its course."

Councillor Nagi said: "I am confident the truth will prevail."

'Internal power play'

It is alleged an older woman was pushed to the ground during the incident, while a man in his 40s has been taken to St George Hospital for treatment to minor injuries.

The NSW Liberal Party issued a statement condemning the behaviour.

"The party will fully cooperate with the police in relation to their enquiries. An internal investigation will also be undertaken and disciplinary action taken against those responsible," the statement said.

Prime Minister Malcolm Turnbull wants the NSW Liberal Party to provide full cooperation with police. ( ABC News: Marco Catalano )

Prime Minister Malcolm Turnbull condemned those involved in starting the brawl and told Question Time he agreed with the state branch's objection to the violence.

"I entirely concur in that condemnation by the New South Wales Liberal Party and look forward to their providing full cooperation with police in their inquiries," he said.

NSW Liberal Party president Phillip Ruddock said suggestions that some people may not be welcome are "inappropriate to me".

"We are a party that draws people with strong views and want to be engaged in public life and discuss and talk about issues," he said.

"We want to see that occur in a civilised way."

"After we establish precisely what the facts are we will consider whether we need to take disciplinary action against those involved last night."

He said disciplinary action could potentially involve expulsion.

A senior Liberal Party source who did not want to be named said the fight was the result of an "internal power play".

"The worst thing that normally happens in Liberal Party pre-selections is someone flicks the toothpick that holds together the cucumber sandwich."

The source said the factional fight was for control of the Liberal Party body that selects local government councillors in the area.

Police were called to Naji's Cafe in Arncliffe just before 7:00pm. ( ABC News )

Elderly lady 'trampled on' in cafe

One witness, who did not want to be identified, described the situation as an attempted "hostile takeover" of the branch.

"Just before the meeting started, there was an altercation where some people were intimidating and swearing and pushing and shoving of the others who belonged to the meeting," he said.

"Others outside were blocked from entering the meeting."

The man said an elderly lady inside the cafe was "trampled on", and a man who tried to intervene was "ganged up on".

A witness shows how his phone was smashed in the altercation. ( ABC News )

"They started bashing him … they took him outside and started kicking him.

"To be honest I thought he was going to die."

The man also said some people tried to film the incident, but their phones were taken and smashed.

Police are yet to determine how many people were involved in the incident and are appealing for anyone with vision of the incident to come forward.