A double murder suspect has been shot dead by police after a wild shootout and car chase that unfolded around families out walking in central Tauranga.

Police last night fatally shot the man they had been seeking in relation to a double homicide at McLaren Falls, near Tauranga, on Tuesday.

Two men had been found dead inside a property at Ormsby Lane after police received reports of shots fired at 7.40pm that evening.

The discovery came not long after several people - including at least one child - were seen running from the property as shots rang out.

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Tauranga Mayor Tenby Powell said today he would convene a community meeting to discuss gang turf wars in the area.

District commander Superintendent Andy McGregor said yesterday that police tried to stop a car at 7.46pm on Carmichael Rd in relation to the fatal shooting of the two men on Tuesday.

The car failed to stop and a gun was fired at police, he said.

The vehicle belonging to a man fatally shot by police in Tauranga last night. Photo / SNPA
The vehicle belonging to a man fatally shot by police in Tauranga last night. Photo / SNPA

"The vehicle fled toward the CBD and continued to fire shots at police. The vehicle then stopped and an occupant continued to discharge the firearm."

"Police returned fire and in the exchange the offender was fatally wounded."

Images of the black car show it crashed into bushes as a police vehicle stands behind it. The driver's door of the black car is wide open.

A witness told the Herald he could see a man's body on the ground and a nearby car appeared to have been run off the road.

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Armed police officers were seen standing near a man's body.

"There were police in black - like what the armed offenders squad wears," they said.

It is thought no one else was in the vehicle at the time of the incident.

Residents reported hearing shots and seeing ambulances and police with guns rushing towards the area.

One person said there were "a number of families out walking" as the shots were being fired out the window of the fleeing car.

The scene of the shooting incident under police guard on Friday morning. Photo / Alan Gibson.
The scene of the shooting incident under police guard on Friday morning. Photo / Alan Gibson.

"[It was] bloody lucky no one got hit."

Witness Shianne Ormsby said she saw "a huge amount of police respond" to the situation.

"Little did I know they'd be a few metres from my house blocking off the main set of lights, all while being armed."

Mike Dork, who works in the area, said he saw up to 10 undercover police cars screaming southbound down SH2.

"Every cop in the area looks to be here," he said.

Another resident said she heard multiple rounds of gunshots ring through the air and the rush of police cars chasing the offender.

Armed police patrol the site early on Friday morning. Photo / Alan Gibson.
Armed police patrol the site early on Friday morning. Photo / Alan Gibson.

Police said there was no further risk to the public.

Mayor's concern at gang turf wars

Tauranga mayor Tenby Powell said today he was "very concerned" about an innocent member of the public becoming collateral damage in the gang turf wars.

While police were doing a "stunning" job in difficult conditions, shots were fired in a public area last night.

"The weapons that are being used have a maximum effective range of 500 to 600 metres ... a bullet that's got long range and can do a lot of damage."

Powell said the people carrying the weapons "certainly don't care what's in their background".

"I'm worried a stray bullet will kill someone in the crossfire."

Powell said a community meeting would be held with himself, Western Bay of Plenty mayor Garry Webber and two police commanders in the coming weeks to talk about what was going on.

A date is yet to be confirmed.

Earlier this week, Police Minister Stuart Nash warned residents they should expect to see more armed police in the street following the double shooting.

He said the escalated response was a temporary measure aimed at tackling the latest flare-up between gangs.

State Highway 2 still closed

Police in Tauranga will speak to media at 9am.

A police van at the police cordon on the closed SH2 in the early hours of Friday morning. Photo / Alan Gibson.
A police van at the police cordon on the closed SH2 in the early hours of Friday morning. Photo / Alan Gibson.

Meanwhile, motorists can expect a large chunk of State Highway 2 - closed off during last night's events - to remain closed until further notice.

The NZ Transport Agency said just before 6am that SH2 is closed between the Waihī Rd off-ramp and Cameron Rd.

The road is closed "due to a police incident" and drivers are advised to use an alternative route or expect delays.

A spokeswoman at Bethlehem College said the closing of State Highway 2 had affected students getting to school on time this morning.

Today is the Year 9 to 13 athletics day at the Tauranga Domain which had complicated matters further. She said they were doing their best and students were still coming into school due to delays.

Police blocked off access to SH2 in Tauranga last night. Photo / Sandra Conchie
Police blocked off access to SH2 in Tauranga last night. Photo / Sandra Conchie

"Expect to see police openly carrying their Bushmaster rifles and Glock pistols. Expect to see police wearing their new body armour," he said in a statement.

"Expect to see the Eagle helicopter in the air. Expect to see police executing search warrants at gang properties and stopping vehicles carrying gang members and associates."

Tuesday's homicides were the latest in a series of brazen shootings involving semi-automatic firearms, with a suspected arson along a row of the Bay of Plenty shops last month.

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Nash said the Government was pouring more resources into policing the Bay of Plenty, targeting gangs and organised crime.

Detective Inspector Mark Loper said a scene examination was ongoing at the property of Tuesday's shooting with support from forensic specialists and an Auckland specialist search group.

He said additional investigation staff were being brought in from around the country to assist Bay of Plenty police.

The dead men are believed to be Paul Lasslett, 43, who owned the property, and Nick Littlewood, 32.

Loper said yesterday police were still working to understand the circumstances of the deaths and the involvement of any other parties.

"While police have spoken to a number of people in relation to the incident, we believe there may be others who are yet to talk to us."

Mayor Powell told Newstalk ZB he wanted to see the situation unfold further before he commented on tonight's shooting.

"I'm very proud to be part of this community; the police are doing a great job under incredibly difficult circumstances."