The State Coroner has ordered an extraordinary third inquest into the cliff-fall death of American Scott Johnson, whose family believes his "gay hate" killer or killers could be caught more than 26 years after his plunge from Sydney's North Head was ruled to be a suicide.

"The perpetrators are probably still alive and local," Mr Johnson's brother, Steve, said outside the Coroner's Court at Glebe after the decision on Monday morning.

"I think this decision lights a fire under the people who committed this crime and thought they got away with it."

The inquest could question "no fewer than 50 people of interest" and investigate "five gangs or loose groups" who were known to have been bashing gay men in the same area at the time Mr Johnson, a 27-year-old maths genius and PhD student, fell from the cliff near Blue Fish Point, counsel assisting the Johnson family, John Agius, SC, told the court.

Sarah Pritchard, SC, for Police Commissioner Andrew Scipione, told the court that police would not resist a third inquest.

But she "put on the record" that Detective Chief Inspector Pamela Young – the Unsolved Homicide Unit investigator who prepared a 445-page report for the court – did not believe another inquest would lead to a different conclusion than the open finding delivered by Coroner Carmel Forbes in 2012. Ms Forbes found it could have been suicide, an accident or murder.

Mr Johnson said he had stood outside the same court 26 years ago when Coroner Derrick Hand delivered the suicide finding, based on a hasty "non-investigation" by police, and which he has never believed. A wealthy IT entrepreneur, he has spent about $1 million investigating the case since 2007, driving his own and police inquiries that have led to the latest decision by Coroner Michael Barnes.

The court could not confirm a report that it was the first time in NSW that a third inquest had been ordered into the same case, although Mr Agius referred to the "historical" nature of the matter. Nationally, it compares with the Azaria Chamberlain case, which was the subject of four inquests.

Mr Agius told the court  it was "beyond comprehension" that Chief Inspector Young's report had devoted a great deal of time to the suicide theory when there was not a "skerrick of evidence" to support it and that this possibility had been "put to bed".

He objected to police having any say in the scope of the inquest, saying the family had no confidence in their position – and claimed that police were opposing a third inquest only last week.

"I don't know who has fallen off their horse since last week," Mr Agius said.

Ms Pritchard rejected that police had ever opposed a third inquest.

The Crown Solicitor had recommended Mr Barnes order the third inquest. But outside court, Mr Johnson said he was disappointed that the wheels of justice would still turn slowly, and it would be at least another year before any formal finding.

Mr Johnson ordered his own investigation in 2007 in the wake of another coronial finding that two gay men and probably a third had been murdered around the Bondi-Tamarama clifftops amid a spate of gay-hate crimes in the late 1980s.

Police experts who gave evidence in that case suspect they could have been among as many as 30 gay men bashed to death over about three decades.

Scott Johnson's body was found at the base of the cliff near Manly on December 10, 1988.

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