UPDATED 7pm

Road closures will remain in place overnight, as police continue to hunt a gunman who shot at police in the early hours of this morning.

An examination of the scene at Kuranui Road has been underway today and is expected to continue into tomorrow.

The road will remain closed between Avenue Road and Scott Road until it's completed.

Police say the gunman involved in this morning's shoot out in Morrinsville is still on the run and could still be armed.

Officers were fired upon on Kuranui Road just after midnight following a police chase.

Waikato Police Superintendent Bruce Bird says they arrested one person at the scene, and arrested another person this morning in Morrinsville.

He says they are still looking for another person -- the suspected gunman -- and he could be armed and dangerous.

He says they will be checking addresses with the assistance of the Armed Offenders Squad this afternoon, in search of the suspected gunman.

Police believe a military-style semi-automatic weapon was used in the shoot-out.

Meanwhile, a resident has described seeing four police officers running for their lives as they were shot at by occupants of a car they were pursuing.

Craig Burmester was woken at his Morrinsville home by dozens of gun shots before seeing four dark figures running up Kuranui Rd towards his property.

It would be when he called police to report the incident that he learned those figures were actually police running for their lives.

It was just after midnight when Burmester was woken by his wife.

She had heard sirens first and was concerned as they knew their daughter had been out for the night. She checked to make sure she was home - she was - before peering out the window and hearing shots about 12.15am.

"It was quite a few shots," Burmester said.

"And then I woke up and then there was an awful lot of gun shots, you know, six or 10, and you could tell there were two different guns.

"It originally sounded like fireworks or a paint shop exploding, we didn't know it was gun shots, so we both went outside and had a look and we heard more from the guns and there was a police car that had its lights going and we saw four figures running up the road."

As it was foggy and dark, they weren't sure who the people were so he rang police.

"Police got back to me and said 'No, it's our people, it's okay'," Burmester said.

"I don't know if they were running away from the gun fire, I think they were."

He said police called him back soon after and told him to stay inside.

"Police rung back and told us to keep the lights off, keep the doors locked and then half an hour later and said the same thing, keep the lights off, don't answer the door. So the police were quite good."

Burmester saw the officers walk back to the scene about half an hour after hearing the shots.

He said it was hard to work out where the shots were coming from as the noise was bouncing off a river which runs adjacent to their property.

However, when they heard the police Eagle helicopter about 1.30am, they knew it was serious.

"I thought somebody must have been killed with the amount of interest in it."

"It was pretty scary. It's just lucky no one was injured."

Armed Offenders Squad officers also arrived and the Burmesters watched as they walked around and through buildings on neighbouring properties, making sure the offenders weren't in there.

Burmester hadn't slept all night and he expected his wife and daughter to also be tired as they had a pre-planned trip to Auckland.

A major manhunt is underway for the offenders who shot at the officers.

Police had attempted to stop a speeding vehicle on Thames St, Waikato District Commander Bruce Bird said.

The driver failed to stop and a police unit started pursuing the car.

The chased vehicle eventually stopped on Kuranui Rd before one of the occupants got out and shot at officers.

A second police car arrived and officers fired shots in return.

Police staff then took cover in nearby farmland.

The area was cordoned off and Waikato AOS arrived shortly after to escort the officers to safety. They are uninjured.

The police Eagle helicopter has also been deployed to the area and is assisting.

A reporter at the scene said windscreen of a police car parked on Kurunui Rd is littered with about 20 bullet holes while the car alleged to have held the offenders remains in a ditch.

The driver's door of the patrol car remains open, from when the officer has appeared to have fled for his life.

It has come to a stop on the wrong side of the road and fluid appears to have leaked from the vehicle which was shot at several times.

The red, late model Holden - used by the offenders - has about six bullet holes in the driver's window. The rear passenger door is and it's boot open as the vehicles remain in the middle of a police cordon on Kuranui Rd this morning.

Cordons have been relaxed so Kuranui Rd is closed between Avenue Rd South and Scott Rd, officers placed at each end.

Occupants of a Kuranui Rd house in the middle of the small cordon are trapped inside and can be seen standing outside getting a closer look at what's happened.

Another resident, Kaye Turner, said she woke to a helicopter going over the area for a long time from 2am.

She said from her home, about 3km from Morrinsville, she saw what looked like red flashing lights towards the town.