They thought blanks were fired and that Bennett was trying to escape.
But Bennett — shot twice in the chest and once in the hand — collapsed after running downstairs to the ground floor of the court building.
Seconds earlier the killer told him: “Cop this you — —” before firing three shots from a .38 revolver from less than three metres.
The killer fled down rear stairs after threatening to shoot two unarmed detectives.
Bennett, also known as Raymond Chuck, died on the operating table in St. Vincent’s Hospital at 11.25 am.
Underworld sources told police the killer was promised $50,000 for murdering Bennett.
The sources said the contract was one of three issued following the disappearance of former painter and docker Leslie Herbert Kane in October last year.
Police have information that two men acquitted with Bennett of Kane’s murder on September 22 this year, have fled overseas.
They say Francis William Mikkelsen, 33, and Laurence Joseph Prendergast, 29, fear for their lives.
Two criminal factions began feuding before Kane’s murder.
Police believe Bennett’s execution will cause underworld reprisals.
Police had a strong lead last night that an English “hit-man” travelled to Australia for the killing.
The man, 41, was deported from Australia to England earlier this year.
Police said he was a former member of the “Toe-Cutter Gang” which in 1970 tortured other criminals for armed robbery takings.
Police said the man was seen in Sydney and Melbourne recently.
His description fits the killer who sat calmly on a wooden bench outside the 10th Court, on the first floor of the Russell Street building, until Bennett was led up a flight of stairs at 10.17 am.
Senior Detective John Mugavin held Bennett, who was not handcuffed, as they neared the top of the stairs.
The killer, wearing a dark suit and gold-rimmed glasses, stepped forward tram the bench, said the five words to Bennett, and fired.
Detective Mugavin said last night he immediately moved forward to grab the killer.
“He waved the gun and said something. I moved back a bit and then Bennett took off down the stairs.”
Detective Mugavin said the killer was calm as he turned to Senior Detective Phil Glare and said twice: “Don’t make me do it.”
Senior Detective Mugavin said he turned and ran downstairs after Bennett.
Senior Detective Glare, of the consorting squad, said his first thought was that blanks were fired and that it was a bid to free Bennett.
“It happened that quickly. I went to follow the killer and then a court prosecutor yelled to me to get a gun first,” he said.
“I ran downstairs and grabbed a gun from a uniformed policeman in the courtyard.
“He had disappeared when I ran back up.”
Senior Detective Mugavin said that when he saw Bennett had collapsed in the courtyard, he glanced into a rear stairway and saw the killer.
“I gave chase but he disappeared before I got to the door,” he said.
Police on duty in the court said the killer looked like a barrister.
He was wearing a neat, black or dark blue suit with a white shirt and a tie.
Police took several minutes to establish that the kilter ran down the stairs, through an unlocked door to a lane, across the magistrates’ carpark and into a motor workshop.
A piece of tin at the rear of the workshop was pulled away, allowing him to jump into the Royal Melbourne Institute of Technology carpark.
The metropolitan crime coordinator, Detective Superintendent Phil Bennett, said last night the killer may have had an accomplice.
“It was a daring, well-planned, callous murder,” Mr. Bennett said.
“It was the work of professional killer.”
Mr. Bennett admitted that police had a lead that the English criminal was responsible but declined to elaborate.
The dead man, of Kiewa Crescent, East Keilor, was to have appeared on charges relating to two armed robberies earlier this year.
The charges were the armed robbery of $69,302 from the Bond Weaving Mills in Yarraville on March 15 this year.
Bennett was also charged with robbing Jozef Jasmin of about $85,724 on June 20.
A barrister, Mr. Noel Ackman, was sitting in the courtyard when the shooting started.
“I heard three shots and then I saw a man running down the steps and across the courtyard,” he said.
“At first I thought be must have been the gunman as he was running strongly.”
Mr. Ackman said the man then staggered and collapsed at the entrance to the courtyard.
A doctor who was in the courtyard attended Bennett until ambulance officers arrived.
Bennett’s wife, Val, who was in the 10th court when the shooting started, was taken to the watch house and comforted.
Police immediately sealed off the building after the shooting. Most police inside the courts were unarmed and had to wait until guns were brought across from Russell Street.
The anti-terrorist special operations group was called in minutes later when it was thought the killer could still be inside the building.
About 20 group members, some with Armalite automatic rifles and pump-action shotguns, searched for about 25 minutes before declaring the building clear.
The shooting threw the court into confusion. Police found the exits blocked by witnesses, barristers and other people who were trying to get out.
Police were told to watch for a maroon Holden seen leaving the area just after the shooting, but last night had not confirmed that it was involved.
The killer was described as 173 centimetres, of medium build, with a bushy black beard and moustache.
Police went to all interstate and international air terminals in case the killer tried to flee Victoria immediately.
They also checked other transport terminals and raided underworld haunts yesterday afternoon and last night.