IMAGES of a couple who were shot by police at a fancy dress party in Melbourne have emerged, as police defend their decision to open fire.

Dale Ewins, 35, and Zita Sukys, 37, were shot by police during a Saints and Sinners party - in a room where "naughty stuff happens" - at the central city Inflation Nightclub just after 3am on Saturday.

The couple was in costume, as The Joker and Harley Quinn, and a picture published on social media shows Mr Ewins, a bartender, holding what appears to be a toy gun in the mouth of Ms Sukys.

Police said they shot Mr Ewins when they stormed the nightclub, that was reportedly hosting a swingers party, after receiving reports of an armed man at the venue. Both he and Ms Sukys, who was shot in the leg, are in stable conditions in separate Melbourne hospitals.

The club's owner Martha Tsamis said the man wasn't holding a gun and was in a "compromising position" with the woman when police "stormed in" and opened fire. Police refused to comment on Ms Tsamis's claims.

The club was hosting a raunchy Saints and Sinners Ball, described on its website as a "no holds barred extravaganza of adult fun".

Dale Ewins, 35, and Zita Sukys, 37, pose with what appears to be a toy gun.
Dale Ewins, 35, and Zita Sukys, 37, pose with what appears to be a toy gun. Seven News

Police say they arrived at the ball after receiving a number of reports that a man had a gun at the venue.

Security told police the gun was a toy or fake weapon rather than a real one. But police claimed officers approached the man he allegedly drew the gun from his pants and would not drop it when asked.

"As a response police then fired a number of shots and a male and female were injured," Superintendent Lisa Hardeman said on Saturday.

"Police called on the male, the male took the firearm from his pants and aimed it at police," she said.

"When a gun is aimed at you … and you ask somebody to drop the gun and that doesn't happen, (you) need to make a split-second decision to protect yourself.

"Police don't come to work to shoot people."

The couple was shot at the nightclub.
The couple was shot at the nightclub. Seven News

Several witnesses have disputed the police version of events and said Mr Ewins was not holding the replica gun at the time he was shot, reported The Herald Sun .

No charges have been laid over the shooting.
No charges have been laid over the shooting. Seven News

A witness, who gave her name as Kim, told the Sunday Herald Sun 30 to 40 police stormed the dimly lit room "where the naughty stuff happens".

"They said, 'put your weapon down', and he went to reach a little plastic thing that was a part of his outfit saying it was nothing.

"Then they opened fire - bang, bang, bang - they didn't even give him a chance."

Inflation owner Martha Tsamis also said Mr Ewins had a toy gun as part of his costume and was not holding it when he was shot.

"Venue staff have stated that the male victim was not holding anything in his hand but rather he was in a compromising position with his female partner, which is a normal activity with the nature of this event," Ms Tsamis wrote in a Facebook post.

"These events have been held for approximately 20 years at Inflation without any incident."

In the lengthy post, Ms Tsamis said "no patron at the event came to us to inform our staff or security of this concern but apparently made an anonymous triple zero call to police".

She wrote: "Security had no concerns prior to the incident, and advised police on attendance that they were more than happy to deal with any issues.

"But police rejected this advice, stormed in, fired three shots, and a taser, with the outcome being two people suffering from serious gunshot wounds."

The Police Association has backed the officer who fired the shots, as an inquiry by the The Armed Crime Squad and Professional Standards Command gets under way.