Glen Russell Gibson, 21, was arrested and taken into custody on Tuesday night and set to appear in court on stealing charges.

As he was being led towards the dock by corrective services personnel he made a sudden break towards the rear door of the courtroom and was out into the general area of the court in a matter of seconds.

He was pursued by two corrective services officers, one of whom grabbed hold of Mr Gibson, but the escapee struck the officer on the arm and he fell to the ground, dislocating a finger.

Mr Gibson then ran out onto the lawn of the courthouse grounds before jumping a fence and running towards Macquarie Street, where he ordered a taxi driver to take him to a house in Algona Street, West Dubbo.

Dubbo police immediately sent out patrols both in vehicles and on foot. A number of homes were searched in an effort to locate Mr Gibson, but to no avail.

Following Mr Gibson's escape Magistrate Paul Lyon asked "What was that young man's name?" before calling for the next case to be brought in.

According to a court source, who wished to remain anonymous, Mr Gibson's escape had raised serious questions about current security measures at Dubbo courthouse.

Court staff were not available for official comment, although one corrective services officer said it was only the second escape he had seen in 40 years of service.

Late yesterday afternoon police received a call about a possible sighting of Mr Gibson near Jubilee Street and more than a dozen vehicles, including paddy wagons, circled the surrounding streets for about an hour. A number of detectives also joined the search.

Police also received a report Mr Gibson had been dropped off at a Goode Street address in a red Ford Falcon, which was pulled over but no arrests were made.

Dubbo police described Mr Gibson as being 175cm tall, of medium build with a dark brown complexion and black hair.

He was last seen wearing a black T-shirt with a dragon motif and black shorts with white stripes.

He was also described as dangerous and police said he should not be approached.

Any information regarding Mr Gibson's whereabouts can be directed to Dubbo Police Station on 6881 3222 or Crime Stoppers on 1800 333 000.