A 24-year-old man faces a string of charges after police allegedly located sawn-off firearm and ammunition while searching a vehicle at Lake Macquarie on Thursday.
Police said they had first observed the Volkswagen Golf on Honeysuckle Drive at Newcastle, where it allegedly accelerated away from officers attached to Northern Region Operation Utah.
A short time later, police from the Hunter Regional Enforcement Squad and Northern High-Visibility Policing Unit located the car at a carpark of a licensed premises on the Pacific Highway, Gateshead, with a female passenger inside.
During a subsequent search of the vehicle, officers allegedly located the firearm that was wrapped in clothing and a plastic bag containing ammunition.
The items were seized for forensic examination.
Following inquiries, two men, aged 24 and 32, were arrested inside the venue and taken to Belmont Police Station.
The 24-year-old was charged with seven offences including possessing an unauthorised prohibited firearm, possessing an unregistered firearm-prohibited firearm, possessing a loaded firearm public place, possessing ammunition without holding a licence, permit or authority, possessing a shortened firearm (not pistol) without authority, not keeping firearm safe, and driving a motor vehicle during disqualification period.
The 32-year-old was charged with a breach of bail offence.
Both men were refused bail to appear at Belmont Local Court on Friday.
Investigations are ongoing, anyone who may have witnessed a grey Volkswagen Golf between 11am and 12.30pm in the Newcastle area or who may have dash-cam footage from the nearby area during these times is urged to contact Crime Stoppers on 1800 333 000.
