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Police have found Jan Molenaar's body in his bedroom.
The announcement was made just before 12.30pm, officially ending the three-day siege.
Earlier, a resident with a direct view of Molenaar's house said he could see the army's armoured vehicle in the gunman's driveway and an armed police officer walking openly
on the street 50 metres away.
Wayne Rollinson told nzherald co.nz "it's over". Mr Rollinson has been following events at the house all through the night.
He said the tank-like army vehicle was in the driveway and it had its nose pointed into the driveway, just 12 to 15 feet away from Molenaar's front window.
"There's no way they could be doing this without getting fired upon," Mr Rollinson said.
There had been fresh explosions at the scene of the Napier siege just before midday.
Herald reporters at the scene said two explosions, about three minutes apart, just shook the street.
Earlier AOS members had gone through the cordon toward the house.
Police this morning would not confirm Molenaar was dead, despite a source confirming Molenaar's death to the Herald.
Previously, at a press conference in Napier, Superintendent Sam Hoyle said the last contact with Molenaar had been "some hours ago".
Mr Hoyle said it had not been confirmed Molenaar was dead.
"Until his status is confirmed he is alive and dangerous," Mr Hoyle said.
His comments came after a witness told the Herald they had seen police in Molenaar's house earlier this morning.
Mr Hoyle said police has discharged a number of explosives at the house overnight to access parts of the property.
My Hoyle said the shots fired during yesterday's exchange were gas cartridges. He said no shots were fired out of the house and no gunshots were fired by the police.
The Herald understands police last night believed the Napier gunman to be dead and early this morning large explosions were heard at the scene.
Two big blasts were reported at the Molenaar house.
Radio NZ reported that the first blast occurred around 3.15am, with the second occurring just before 6am.
"An armoured personnel carrier went to the site about 4am and returned an hour later, while an ambulance and police vehicles also went towards the property," says Radio New Zealand.
"We heard one loud explosion and it also seemed as if there were gunshots as well," photographer Kerry Marshall said.
Mr Marshall added a four-wheel drive vehicle came out of the cordon lines about the same time, driven by what looked like an Armed Offenders Squad member.
Newstalk ZB radio suggested the blast was caused by explosives set by a robot normally used to destroy bombs.
Police were last night able to recover the body of their fallen comrade, Senior Constable Len Snee, from where it lay in the garden of Molenaar's property.
It had been there for almost a day and a half, since Molenaar shot Mr Snee and three other people on Thursday morning.
Police made the recovery using tank-like Army light armoured vehicles and under a hail of automatic gunfire.
The two Army LAVs pulled up outside Molenaar's two-storey home on Chaucer Rd in Napier soon after 5pm yesterday.
Chaucer Rd resident Mr Rollinson - who had a clear view of Molenaar's house up the road - told the Weekend Herald he could see bomb squad robots being used to recover Mr Snee's body.
"Two tanks came in to get the body. They passed him to one tank, which came out and the other one stayed there.
"Jan was firing and there was returned fire too - I wouldn't be surprised if he got shot.
"We thought he might've got shot - it was quiet. And then there were more shots. It was like he'd pull the trigger once and 10 shots came out."
Mr Rollinson said he heard an initial volley of about six rounds, and he was sure it was Molenaar firing.
Then came more rapid automatic fire, this time up to 20 rounds.
This was when "the tanks and armed offenders squad opened up".
He said that around 9.45pm, police officers were still on the street.
"It's all dark and he [Molenaar] is still up there. There's no movement, no noise, nothing. But there's still cops outside his house and on the street."
The first of the LAVs returned to the Army base shortly before 6pm, when police revealed that Mr Snee's body had been recovered. The other returned soon afterwards.
Eastern district commander Sam Hoyle earlier described the inability to recover Mr Snee's body as hideous for his family and for the friends and colleagues who had kept working through the siege.
"We are pleased for the family that we are able to bring him out - it has been a traumatic and immensely difficult time for them," he said.
No officers were injured in the retrieval of the body, nor in any of the other clashes in the siege, which began after Molenaar fatally wounded Mr Snee and critically injured his fellow senior constables Grant Diver and Bruce Miller as well as a civilian who has not been publicly identified.
Local residents said Molenaar's house had panoramic views and a closed-circuit security camera at the front.
Molenaar did not have a gun licence, but he had many weapons, a lot of ammunition and possibly explosives.
One associate told the Weekend Herald that police let two young friends of Molenaar take food to him yesterday morning.
The woman - a friend of those who took the food and who asked not to be named - said they told her that 51-year-old Molenaar had "a shitload of ammo".
They said Molenaar had bomb-making materials and a powerful semi-automatic rifle.
Mr Hoyle said telephone negotiations with Molenaar had gone back and forth, and the gunman had sometimes called police.
He described him as a "complex character" but would not discuss his possible motive for the shootings.
One local teenager, Alex Cunliffe, 16, said Molenaar had been unhappy with police, believing they had a racist attitude towards his Maori partner.
- NZ HERALD STAFF AND AGENCIES
