An inquest into last year's siege at a Sydney cafe has heard that the gunman was a self-obsessed fabulist who grew increasingly defiant as he edged closer to launching his deadly attack.

The details of Man Monis' life and death were being examined Monday at a coroner's inquest investigating the circumstances of December's crisis at the Lindt Cafe. Monis took those inside hostage and forced them to outline his demands in online videos — including that he be delivered a flag of the Islamic State group. The standoff ended when police stormed the cafe.

Coroner Michael Barnes said the inquest would try to answer whether Monis was a lone wolf perpetrating an Islamic State-inspired terrorist act, or a "deranged individual" pursuing a personal private grievance in a public manner.