Australian police stormed a law firm where a man claiming to have a bomb was holed up with a young girl, ending a stand-off which had forced parts of a Sydney business district to be evacuated.

Authorities had tried for hours to convince the middle-aged man to give himself up as roads in the Parramatta area of western Sydney were shut and workers cleared from the scene, which is near the city's Family Court precinct.

But after 11 hours, police were unable to resolve the matter peacefully and raided the office and arrested a 52-year-old man, Assistant Commissioner Denis Clifford told Macquarie Radio.

"Towards the latter part of the time we've been here those negotiations have started to break down and then deteriorate to a stage where police have taken action to break into the premises and take a 52-year-old man into custody," Clifford told reporters.

"He's currently assisting police with their ongoing inquiries."

Clifford said the girl was distressed but otherwise unharmed and and now being cared for by family.

The man had entered the legal offices just before 9:00 am with a 12-year-old girl and demanded to see a person who was unknown to staff, a clerk told reporters. He claimed to have a bomb in his backpack.

Police had been treating the bomb claims seriously.

"There was always a question of whether there was a device in the bag," Clifford said.

"At the moment our bomb technicians are, as you can understand, very carefully examining that backpack just to see what is in it," he said, adding that police worked on the assumption that the bomb threat was real.

Television footage had showed a shirtless, middle-aged man wearing a lawyer's wig looking out of an office window.

He later smashed a hole through one of the glass panels and reportedly dropped down a handwritten note.

A clerk at the law firm told the Australian Associated Press the man wanted to see a particular person who was not known to the company.

"He said he was looking for a certain person," said the woman, who declined to be named. "I told him he wasn't here, I told him he is not a client of ours, I do not know him.

"When I told him there was nobody here by that name he went up to the next level of the building then came back down... and he asked for the person again.

"I said, 'I'm saying he's not here'. He then went to the front of the building and said 'call the Attorney General's department, call (this person) and tell them I've got a bomb in my backpack.'"

It is the second time in as many months Sydney has been hit by an explosives scare, with teenager Madeleine Pulver making worldwide headlines in August after finding herself at the centre of a collar bomb hoax.

A man was arrested in the United States some weeks ago over the incident, which saw a 10-hour police operation to remove the crude device -- ultimately found not to be a bomb -- from the 18-year-old's neck.

Charges are yet to be laid and no motive has been identified.

It followed a dramatic stunt in May by an ex-military officer angry about a custody dispute who scaled the city's iconic Harbour Bridge and unfurled protest banners, bringing traffic to a standstill.

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