The gunman who carried out a deadly siege in a Sydney cafe last year may have suffered from chronic schizophrenia, a psychiatrist who had treated him told an inquest on Wednesday.

Iranian-born Man Haron Monis took more than a dozen customers and staff hostage at the upmarket Lindt cafe in the city's financial heart on December 15, an incident which shocked the nation.

An inquest into his death and the deaths of two hostages at the end of the 16-hour siege, is probing Monis' motivations -- including whether he was a "lone wolf" prosecuting an IS-inspired terrorist act or a deranged individual.

READ: Sydney siege inquest to shed light on how hostages died

It was told Wednesday that Monis had mental health issues and at times believed he was under constant surveillance by security agencies in Australia and Iran.

Monis was referred to a psychiatrist in May 2010 after he ended up in hospital complaining of dizziness.


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"He was very evasive in his answers -- he felt that he was being watched all the time, even in his bathroom," psychiatrist Kristen Barrett, who first saw Monis that May, told the court.

"My impression was that he had chronic schizophrenia and my treatment plan was to start anti-psychotic medication."

Barrett said she had prescribed medication for Monis and he seemed to improve, but by early 2011 he stopped taking the drugs and a few months later ended their sessions.

Monis, a self-styled cleric who had a history of extremist views and who demanded an Islamic State flag during the siege, was killed by police when they stormed the building after he shot dead cafe manager Tori Johnson, ending a long ordeal which put Sydney's financial district in lockdown.


PHOTO GALLERY: Gunman takes hostages in Sydney cafe

Customer Katrina Dawson, a 38-year-old barrister and mother-of-three, died from a ricocheting bullet fragment in the incident which Prime Minister Tony Abbott described as a "brush with terrorism".

In his opening address on Monday, counsel assisting the coroner Jeremy Gormly said Monis' mental health issues would not provide the full answer to what caused his actions.

The inquest, which continues, has heard that he was prone to grandiose claims and was prepared to reinvent himself to achieve personal significance, including an unsuccessful bid to join a motorcycle club whose members rejected him as "weird".

By 2014, Monis' life was unravelling -- financial and legal problems were mounting and he had few friends and no standing with any group or institution, including Australia's Islamic community which did not accept him, it has heard.