A Police Ombudsman investigation is ongoing into events at Celandine Court in Gobnascale on Saturday evening.
One officer “sustained stab wounds and police discharged CS spray and a single gunshot”, the Police Ombudsman said.
A man in his 40s was taken to hospital with a gunshot wound to his chest and remains in a stable condition.
In a statement, the PSNI said: “As officers were dealing with the incident, a police firearm was discharged and the man sustained a chest injury.
“A police officer sustained a knife wound to his arm and head during the incident and he was taken to hospital for treatment.”
Speaking to BBC Radio Foyle, chair of the Police Federation Mark Lindsay said the use of lethal force by police officers is always a “last resort” and described the incident on Saturday as further argument for the widespread roll out of Tasers.
Currently, 300 specially-trained officers across the North of Ireland are permitted to carry Tasers, which are designed to use an electric current to incapacitate individuals.
“You get trained so much, but sometimes spontaneous situations can arise where police officers simply have to act quickly to save their own life or save somebody else’s life.
“Unfortunately, this appears to be one of those cases on this occasion.”
Mr Lindsay said one officer was “stabbed in the arm and had a stab wound to the head” and “that is where I presume the use of the firearm was then decided on”.
The police officer involved in the incident on Saturday has since been discharged from hospital.
Mr Lindsay said the PSNI has issued an additional 30 Tasers to be rolled out to one further policing unit in the north west, but said concerns remain over costs to potential further rollouts.
“All of this costs money, the roll out of Taser requires initial purchase, initial training and continuation training every year.
“The additional 30 that are required is an additional cost, we want to do what’s right but the funding isn’t there,” he said.
Sinn Féin MLA Martina Anderson said she was “really shocked that a lethal weapon, a gun was used at a call-for-help incident”.
“My understanding is that the PSNI went to the flat after a call for help was made perhaps by the individual himself and when they arrived an awful incident unfolded and resulted in the man being shot.
“The bullet missed his heart but grazed his lung and exited his body and a PSNI officer was injured during the incident and stabbed, and whilst he went to hospital thankfully his injuries are not serious.”
The Foyle MLA said she spent hours in the area talking with residents who were “shocked, hurt and angry at what had happened” and she encouraged them to engage with the police ombudsman’s investigation.
Asked whether she would support the use of more PSNI officer being issued with Tasers, she said: “I’m sure the Policing Board will look at the issue of widespread deployment and tasers have been used in Derry before.”
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