The Department of Corrective Services is investigating the incident, including why Smith, a maximum security inmate at Sydney's Long Bay jail, was not handcuffed to his hospital bed.

According to the report, the convicted murderer was being treated in Prince of Wales Hospital at Randwick when he attempted to flee in his hospital gown while being guarded by two officers.

Nurses allegedly foiled the escape when they noticed the 72-year-old inmate outside his hospital room, trying to remove his intravenous drip, the newspaper reported.

The guards were alerted and immediately apprehended Smith, it was claimed.

Smith, who suffers Parkinson's disease, was reportedly being treated in the hospital's cardiac ward when the incident happened.

A Corrective Services spokesperson confirmed to News Corp that two officers had "failed to keep watch" over Smith, but denied he was trying to escape.

"It is alleged the inmate attempted to get out of his bed," the spokesperson said.

She said the allegation is being taken seriously and two officers would be interviewed as part of the investigation.

The officers would be disciplined if the allegation is proven, she said.

Smith is serving two life sentences for the 1987 road rage murder of tow truck driver Ronnie Flavell in 1998, and the shooting murder of brothel owner Harvey Jones in 1983.

Fairfax Media