Police storm to nab a man claiming to carry a bomb in Sydney

The police barged into a room of the law firm where the man was holed up with his 12-year-old daughter after trying for hours to convince the culprit to give himself up, police said.

The young girl was rescued by the police and handed over to her family while the man, who claimed to be carrying a bomb in his backpack, was taken into custody.

"He is currently assisting the police with the inquiry," the Sydney police chief Denis Clifford told ABC news.

The drama unfolded at 0900 hours local time, middle-aged man accompanied by his daughter walked into a lawyer's chamber and told the receptionist, "Phone the Attorney General's office...I have got a bomb in my backpack".

"When told there was nobody by that name, the man snapped and said I have a bomb in my backpack," the receptionist said.

His threat forced a large part of business centre to empty out and triggered a hostage stand-off in the building, near a court complex.

Police cordoned off the Paramatta area of western Sydney as they started negotiations with him.

Police said the man had smashed the window of the room where he was holed up and was conveying his demands through pieces of paper.

Clifford said the man in his 50's had made a number of demands.

This is a second bomb related scare, the Sydney had to face in recent weeks.

About three weeks ago, a teenager had a fake bomb attached to her neck by an attacker at her home, in an apparent extortion attempt.

The suspect was detained in the US and is awaiting extradition to Australia.