A gunman died last night after a five-hour stand-off with police ended with armed officers storming a flat in Chelsea, West London.

The unidentified gunman, believed to have been armed with a shotgun, fired at officers on at least three occasions and also sprayed a house opposite with bullets.

The siege, which started shortly before 5pm, ended at about 9.30pm when officers entered the flat where the gunman was holed up. There were reports that officers had used stun grenades.

Police would not confirm last night that its officers had shot dead the gunman, who was described as a white man in his twenties.

Metropolitan Police officers are not believed to have shot anyone dead since Jean Charles de Menezes was killed at Stockwell Underground station in July 2005.

An investigation by the Independent Police Complaints Commission into last night’s incident has begun.

One neighbour said that the gunman had shot from a window of a house in Markham Square, where flats cost up to £1.5 million, directly into her home in the adjoining Bywater Street.

The American woman said that she had called the police when the man started shooting at her house, peppering her bedroom walls with shotgun pellets. “He just started to shoot through his window. He was very calm,” she said.

“The gun was facing upwards and you could see he was reloading with another shell. They [the police] ran into my house and I warned them not to stand too close to the window, but an armed officer went straight to the broken window and the gunman fired at him. The policeman crouched down and returned fire, but I don’t think he hit him.”

There were unconfirmed reports that a distressed woman had been heard claiming that the gunman was her former boyfriend and that he was licensed to own four types of firearms.

When police were called in the late afternoon they closed the Kings Road and surrounding streets. Shop staff were told to stay inside and lock their doors as armed police surrounded the large square, taking cover behind parked cars and bulletproof shields.

Charles Gasa, the driver of a No 11 bus, said that he and 25 passengers had sprinted from the bus when they heard gunshots. Mr Gasa, 32, said: “Armed officers rushed out of the cars wearing bullet-proof vests and then second later I heard some gunshots.

“At first I though someone had raided the bank. I just ran for my life and my passengers all did the same. Everyone was terrified.” During the siege anxious residents watched from behind the cordon, including one man whose wife and children were trapped in their home neighbouring the flat that the gunman was in. They were told to lock themselves in the lavatory.

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