Police in Australia have begun an investigation into a confrontation between billionaire gambling tycoon James Packer and the head of Australia's Nine Network.

Mr Packer and his long-time friend and former best man David Gyngell traded punches and wrestled on the ground on Sunday afternoon at Bondi Beach in Sydney.

The incident was captured by a paparazzi photographer.

Rupert Murdoch's News Corp bought the pictures and video clips for a reported AU$250,000 (€167,000).

The Sydney Daily Telegraph devoted nine pages to the incident, including a front page splash headlined "Packer Whacker".

Mr Packer, 46, left his Bondi home today with a black left eye, to face news that police were investigating the fight and appealing for witnesses to come forward.

"Eastern Suburbs Local Area Command has commenced an investigation into an incident that occurred about 2pm Sunday on Sir Thomas Mitchell Road near the intersection of Campbell Parade at Bondi Beach," police said.

"Police have not yet received an official complaint but have appealed to anyone who witnessed, or has vision or images of the incident."

The images taken by a photographer who was in the area hoping to snap Mr Packer with his rumoured new love interest, supermodel Miranda Kerr, sparked a bidding war, with the Murdoch press emerging the winner.

The Telegraph and other media said Mr Packer and Mr Gyngell, who have been friends for 35 years, fell out after the casino magnate split with his wife Erica six months ago.

Reports said tension had been building ever since, with Mr Packer apparently angry that a Nine Network news truck was parked near his Bondi beach home and that he would be "doorstepped" on his arrival home from the airport.

Mr Gyngell reportedly assured him in a testy phone call it was a coincidence, but personally went to investigate.

He was there when Mr Packer arrived home and the verbal abuse quickly escalated into a fight that one witness described as "like two mad dogs going at each other's throats".

They were eventually restrained by Mr Packer's driver and two others as they grappled on the ground.

The day after the melee Mr Packer and Mr Gyngell, who went to the same exclusive Sydney school, released a joint statement insisting they remained friends.

The son of the late media baron Kerry Packer, Mr Packer is one of Australia's wealthiest people with a personal fortune estimated at AU$6 billion.

The family company used to own the Nine Network, but sold their final stake in 2008.

Since his father's death in 2005, Mr Packer has moved the family business away from its traditional media operations and focused on creating Crown, a worldwide gambling empire.