Prison guards received a formal warning for keeping a naked Antonie Dixon in waist restraints for more than 30 hours prior to his death, a court has heard.

Mt Eden's 2009 acting prison manager Grace Smit told an inquest into the killer's death in Auckland today that the guards took it upon themselves to put Dixon in the restraints after his behaviour became erratic the weekend before he died.

The restraint followed a fortnight of difficult behaviour, in which Dixon pulled a home-made knife on his lawyer Barry Hart and set off a fire alarm, Smit said. He also tried to strangle himself and was bashing his head against the walls.

Dixon died in Auckland maximum security prison Paremoremo in 2009, a day before he was to be re-sentenced for a drug-fuelled crime spree where he maimed two women with a samurai sword, murdered James Te Aute and held another man hostage.

Yesterday police told the inquest Dixon strangled himself on February 4 2009 with a piece of anti-suicide bedding after being transferred from Mt Eden to an at-risk cell in Paremoremo.

At the time Dixon had obscured the camera in the room using wet toilet paper.

A psychiatrist believed he should have been continuously monitored, but instead was checked in every 15 minutes.

Earlier the inquest heard Dixon was kept in "unlawful" waist restraints at Mt Eden Prison when his behaviour became erratic on February 1 and 2.

Corrections introduced waist restraints in 2008 to make transporting prisoners safer. They cuff the prisoners' hands to a belt at the waist, preventing movement. The court has heard how prison staff were also using the restraints on Dixon to prevent self-harm, believing they had no other option.

Smit said a senior corrections officer made the decision during the weekend to restrain Dixon with the approval of the custodial services manager but without her consent.

The first she knew of the situation was during a call from National Office saying Dixon was in the "round room" at Mt Eden, naked and in waist restraints.

Normally, Smit said, prisoners would be handcuffed with hands behind their back.

However, after hearing about the issues with Dixon, Smit decided the steps taken were reasonable and practical in the circumstances.

"The [corrections officer] had Dixon's best interests at heart," she said.

"From my investigations I never got the sense from anyone involved in any of the decision making that they were trying to be punitive or malicious or had anything against Dixon."

The officers should have contacted her, however, Smit said, and considered more sustainable solutions.

They also should have put clothing on Dixon to prevent harm from the waist restraints, despite Dixon preferring to be naked.

Spending 30 hours in waist restraints was "not good" she said.

"That is not a reasonable amount of time."

Following investigations several staff were formally cautioned, Smit said.

Mt Eden prison is now managed by private company Serco.

Earlier today the inquest was told Dixon should have been referred to a psychiatrist at Mt Eden prison instead of being transferred to Paremoremo when his behaviour turned suicidal.

He then should have been sent to a specialist psychiatric hospital straight away - but there were no beds at Auckland's forensic service the Mason Clinic - a problem that has not changed in the three year's since Dixon died, prisons health manager Bronwyn Donaldson said.

Donaldson read out evidence from the health professionals who were treating him, which included finding Dixon with a piece of material around his neck and watching him slam his head into prison walls.

A nurse noted Dixon was agitated and in a heightened state of emotion on February 2.

He was later observed trying to run up stairs and bash his head.

"Antonie is out of control," she wrote in her notes.

Prison staff then transferred Dixon to an at-risk unit at Paremoremo.

Donaldson said a clinical review following Dixon's death found forensic psychiatry should have been called instead.

Asked what else she believed should have happened to Dixon, Donaldson said she now knew he should have been in a psychiatric hospital.

However, one of the reasons he was not admitted was a lack of beds.

If Dixon had been admitted, another patient would have had to leave.

"[The clinic] does not have enough beds. Prisoners are on a waiting list. I have not known in all my years at Corrections for it to have empty beds," Donaldson said.

The wait-list was a key issue for Corrections, she said, and one that was being looked into in conjunction with the Ministry of Health.

- © Fairfax NZ News