A 24-year-old man who was shot by a firearms officer after apparently being told by police to "put the gun down" remained in a serious condition in hospital.
Locals have named the man as James Wilson, also known as Cornet, who was believed to have been shot once in the chest.
Armed police were called to Frenchmans Way, South Shields, South Tyneside, around 1am after receiving reports a man was holding a handgun.
Investigators from the Independent Police Complaints Commission have been working at the scene of the shooting, which has been cordoned off, since the morning.
Northumbria Police said it was a "matter of course" for the IPCC to be informed when someone was seriously hurt following contact with police.
Neither the force nor the IPCC would name the man, but the watchdog said he remained in a serious condition. It was understood he was being treated at the Royal Victoria Infirmary, Newcastle.
A local man said his girlfriend heard police shout "put the gun down" then moments later heard a bang. He knew the man who had been shot.
The father added: "I came out and there were police with guns walking up and down in body armour, like they were securing the area.
"I thought they were looking for a gunman.
"Police were working on the man for about 10 minutes, giving him oxygen.
"Then they let the ambulance in and after about five minutes they took him to hospital."
The witness said the man was named as James Wilson, also known as Cornet, and that he was not a gangster.
He said: "It's crazy, you would never have expected that from him, from what I know of him.
"I am really surprised."
Local people have heard the bullet went right through the man's chest. He was described as being skinny.
Earlier, the witness said: "He is a respectful kid, he puts his head down when he walks past you."
He added: "I was thinking: who is daft enough to wave a gun around here? And the man is not that type of person.
"If someone said 'Boo' to him, he would run as fast as he could."
At the scene of the shooting, investigators had placed up to eight yellow markers on the street indicating where evidence had been left.
A local mother, who asked not to be named, said: "For someone to be waving a handgun in the street where people live, it's just disgusting.
"It's an absolute disgrace when it's on your doorstep."
Two women who worked the night shift at a local care home said they heard a single bang in the night.
A police dog handler and his black spaniel were working in the street.
The handler sent the dog into gardens and under parked cars, trying to find evidence.
Investigators talked to local residents and officers have paid close attention to a marked police Volvo which was parked within the cordon.