As Man Haron Monis became increasingly agitated and erratic during his 16-hour siege of the Lindt Cafe, police considered abandoning their negotiation strategy on several occasions, but ultimately concluded they would only enter the cafe if a hostage was killed or seriously injured.
Even as officers stormed the chocolate shop during the early hours of December 16, 2014, they believed that, along with the hostages, they could be killed at any moment by a devastating bomb stuffed inside Monis' backpack.
The response of the NSW police, in particular their strategy of "contain and negotiate" with Monis as he held 18 hostages at gunpoint, was foreshadowed as a critical issue before the inquest by counsel assisting the Coroner Sophie Callan during her opening remarks on Tuesday.
Describing the "contain and negotiate" strategy as "at the heart of the police response", Ms Callan told the inquest the police's plan to storm was part of an emergency action plan, one which would only be triggered if a hostage was killed or injured.
But the high threshold meant 10 minutes elapsed between Monis firing his weapon for the first time at 2.03am, as hostages fled the cafe, and Tori Johnson being shot by Monis at 2.13am.
"In the interim, Monis had fired another round into the wall of the cafe and ordered Tori to his knees," Ms Callan told the inquest.
"I expect questions will be asked of the relevant police commanders and tactical commanders about the appropriateness of setting the emergency action triggers as death or serious injury to a hostage or whether something less should have prompted the emergency action to be carried out," she said.
Ms Callan also told the inquest that on two occasion senior police commanders decided against a plan to end the siege on their own terms.
About 11 hours into the seige, at 8.20pm, senior police commanders had a teleconference where the head of the tactical operations unit attempted to persuade the other commanders to abandon the defensive strategy in a favour of a "deliberate action" plan.
The deliberation action plan "would allow police to resolve the siege at a time and by tactical methods of their choosing rather than in response to Monis' actions," Ms Callan said, paraphrasing the tactical commander.
But after 20 minutes of discussions the tactical commander was overruled and it was decided negotiations would continue and the emergency action plan would be executed if the need arose.
The proposal was raised again during another telephone conference at 11.35pm, after there had been a handover in police command and personnel about an hour and a half earlier.
By now, police had heard Monis advising the hostages to call their loved ones via a surveillance device inside the cafe, the inquest heard.
Negotiators noted this decision by Monis as "a finality thing" in their logs, Ms Callan said.
The inquest heard that Assistant Commissioner Mark Jenkins was briefed that Monis' backpack likely contained two to four kilograms of explosives and "if the bomb was triggered, those inside the cafe and those attempting a rescue were not likely to survive".
On this advice, and the advice of the commander of the tactical operations unit, Assistant Commissioner Jenkins decided the "contain and negotiate" strategy should continue, Ms Callan said.
It was only after a bomb robot swept the cafe at 2.34am, 20 minutes after police had stormed the cafe and fired 22 rounds at Monis, that it was confirmed no explosive device existed. The bomb inside Monis' backpack was a speaker, with wires hanging out.
Police formed the "strong view" that the containment strategy could deliver a "peaceful negotiated outcome", the inquest heard.
"That view was based on matters such as Monis not having harmed any hostages, despite having threatened to do so, Monis not having reacted violently despite the escape of five hostages on two separate occasions and the fact that Monis' behaviour had not escalated despite most of his demands not being met," Ms Callan said.
The final violent moments of the siege, which claimed the lives of Katrina Dawson and Mr Johnson, were covered in detail as the inquest was shown new footage of CCTV vision of the police raid.
Two minutes before police stormed the cafe, Monis was heard saying words to the effect: "You'll be all right everyone, you'll be fine," the inquest heard.
A minute later, at 2.13am, he executed cafe manager Mr Johnson, shooting him in the back of the head after forcing him to kneel in front of him.
"Inexplicably, he then said words to the effect 'Don't move, everything will be fine'," Ms Callan said.
However, as Ms Dawson and Mr Johnson were rushed with fatal injuries to hospital, their families, who had gathered at the NSW Supreme Court less than 150 metres away and had heard the gunfire, were kept in the dark about their welfare by authorities.
Due to the lack of police information, the hostages' families resorted to smartphones to check media coverage of the seige. Only the families of those hostages who had escaped were assured of their safety when they were reunited.
As a result, "the Dawson and Johnson families effectively deduced their loved ones had been killed by a process of elimination as they were the only ones remaining," Ms Callan said on Tuesday.
The inquest heard Ms Dawson was discovered lying in a pool of blood beneath chairs in the north-west corner of the cafe by one of the two officers who fired at Monis, known only as "Officer A" and "Officer B".
An errant bullet likely fired by one of the officers had pierced a chair leg and fragmented before hitting Ms Dawson.
Officer A confirmed she was still had a pulse but paramedics noted she was "unresponsive, pale and having difficulty breathing". Ms Callan said. Despite attempts by emergency doctors to save her, Ms Dawson died at Royal Prince Alfred Hospital at 3.12am.