A plan to negotiate the release of half the hostages trapped inside the Lindt Cafe in exchange for Man Haron Monis getting radio airtime was never put to the gunman.
Instead, NSW Police's head negotiator, who on Monday was accused of ignoring a direction from the on-scene commander, urged colleagues against the plan.
The detective chief inspector, identified only as "Graeme", has also been accused of gross deficiency in his understanding of the situation inside the cafe after saying he believed a demand that Christmas lights in Martin Place be turned off had come from the hostages, and not the gunman.
Graeme said making any deal with Monis could have been "catastrophic".
It has been revealed that less than two hours into the siege, about 11.07am, NSW Police Assistant Commissioner Mick Fuller gave the green light for negotiations for the release of half the hostages in exchange for allowing Monis to speak on ABC Radio.
A four-line entry in the log of the negotiation commander, read out on Monday at the inquest into the 2014 siege, states: "Mr Fuller happy for POI to talk to ABC. Release half of hostages first. Look for concessions/reciprocity."
Asked on Monday by counsel assisting the inquest Jeremy Gormly SC whether the proposal was ever put to Monis, Graeme responded: "No ... I thought it was a dangerous proposition."
Mr Gormly: "Although you had the authority from the police commander to put an offer like this to Monis, you decided you would not because you thought it was too dangerous?"
Graeme: "Yes."
Mr Gormly: "You undermined your commander's direction to negotiate a deal with Monis."
Graeme: "I don't agree with that Mr Gormly, at all."
The detective chief inspector, who has been a police negotiator since 1990 and has contributed to the development of counter-terrorism strategy, said agreeing to such a deal would also have violated a policy of not negotiating with terrorists.
He was also concerned Monis could use the radio to send a message to accomplices, or cause further panic.
In a subsequent exchange, Mr Gormly put it that negotiators weren't able to achieve a peaceful resolution because they were not considering any of Monis' demands, including later in the day when the gunman offered to release two sick hostages in exchange for a statement being read on the radio.
Mr Gormly: "Your team, so far as you know, were not making any offers to Monis? That's correct, isn't it?"
Graeme: "Yes ... other than a peaceful resolution, wellbeing."
Mr Gormly: "But those kinds of things can only be achieved with a bit of hard-nosed offer, correct? ... Everybody wants peace and tranquillity, don't they?"
Graeme: "That's what we were aiming for."
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Gormly: "Yeah, of course you were but you're only going to get it by making a practical, hard-nosed offer, weren't you?"
Graeme responded that the consequences of agreeing to a such a deal "may have been catastrophic".
Police stormed the cafe shortly after 2am, after Monis killed hostage Tori Johnson.
The gunman was killed by police, as was hostage Katrina Dawson.
The inquest continues.
