Police handlers for the lawyer-turned-informer knew the man was romantically interested in Ms Gobbo, who was defending him on drugs charges while also setting him up over his clandestine drug labs.

A handler known as Peter Smith admitted while she was never encouraged to have a sexual relationship with the man, it was left to her and never explicitly discouraged.

"(Sources are) the ones in the position to know how to develop that relationship so the information's forthcoming," he told a royal commission into police use of informers on Thursday.

"She was told not to do anything relationship-wise that she wouldn't normally do."

Ms Gobbo, also known to police as informer 3838, referred multiple times to her relationship with the cook when speaking to handlers, according to the records of their conversations.

"3838 has considered (the cook's) recent lack of contact, and a possibility for this is that 3838 has 'cock teased' him one too many times," a handler wrote in January 2006.

"3838 worried the 'cock tease' approach will not last much longer at keeping (the cook) close," one wrote four months later.

Mr Smith described Ms Gobbo's use of phrase as "quite distasteful" and said he found it "personally awkward" when the topic came up.

Ms Gobbo's lawyer Peter Collinson QC suggested it was in the interest of police for the cook to have romantic feelings toward Ms Gobbo and that it was "pretty obvious" he would be more inclined to tell her about his plans to cook drugs.

Mr Smith said she was tasked with maintaining the relationship in an "appropriate way".

"If he felt that way, which he did, we can't help that. We have to go with the flow," Mr Smith replied.

Australian Associated Press