The undated photograph published in The Daily Telegraph on Thursday shows a boy carrying a toy AK-47 walking with an adult and a child in a stroller.

Scott Weber, the president of the NSW Police Association, said replicas had always been a problem but the risks of overreaction were greater after the trauma of the Lindt cafe siege last year.

Mr Weber said NSW needed a law requiring toy weapons to be "extremely clearly marked" so as to be obviously not real.

"I think that's a sensible step to prevent hysteria and panic," he told Fairfax Media.

"What we want is to stop a tragedy before it happens."

Imitation firearms, defined as objects that "substantially duplicate in appearance a firearm", are governed by strict laws in NSW; their owners must have permits.

But toy guns form a separate category. Legally they must be distinguished from imitation firearms by their packaging, materials, appearance and the way in which they are sold.

Mr Weber said the toy AK-47 in the Martin Place photograph was an example of a realistic-looking weapon.

But Brad Towner, owner of the toy weapon retailer Armoured Heaven, said the toy shown was about a third of the size of a real AK-47.

"I think it's a knee-jerk reaction," he said of the calls for legislative changes. "It all comes down to commonsense, responsibility and context."

Mr Towner said his toys were different from imitation weapons because they were all plastic, had few or no moving parts and sounded different.

NSW Police Minister Troy Grant said the government was considering legislation to stop toy guns from being misused by criminals.

In 2013, then police minister Mike Gallacher called for realistic-looking guns to be outlawed.

"'The issue is for governments to figure out how to work with industry to ensure that these things aren't being used in hold-ups," Mr Gallacher told The Newcastle Herald. He said the issue demanded a national response.