A police marksmen at the scene said he did not shoot the barrister, who was brandishing the gun out of a window, because he could not 'justify' opening fire.
He explained that he was unable to see if Mr Saunders' finger was on the trigger and couldn't be sure that he was pointing his gun at anyone.
Asked why he didn't open fire, the officer replied: ''If I didn't believe the firearm was pointing at anybody I wasn't going to pull the trigger. If I am not sure that somebody else is in the line of fire I will not shoot. Until that point I am not justified to pull the trigger.
A colleague who was with him and did fire one of the fatal shots insisted that he had not made a mistake by opening fire because he believed Mr Saunders was taking aim at armed colleagues on a rooftop opposite.
The officer, described how he stepped forward to see what Mr Saunders was doing. 'I didn't want to make a mistake. I'm making the biggest decision of my life. I wanted to step forward to make sure I was taking the right decision. I didn't make a mistake.
Westminster Coroner's Court heard from one marksmen who said 'backing off' and letting the situation calm down was not an option.
Another said that retreating and then taking up positions again would have been like 'line dancing' going 'backwards and forwards' and was not possible.
The specialist rifle officer, one of the most experienced marksmen in the country, said he opened fire because he believed there was 'imminent threat to life to other officers.'
Asked by the barrister for the coroner, Nicholas Hilliard QC, if he was aware after the incident that Mr Saunders gun was 'open or broken'*, he replied, 'Yes'.