An incorrect sighting of notorious pedophile Dennis Ferguson at a Kurri Kurri supermarket on Monday started a frenzy that was still gaining pace yesterday, despite senior police dismissing it almost immediately.

Social websites continued to attract more than 1500 members last night with calls for violent action, rumours remained of "lockdowns" at schools, at least three addresses were named as housing Ferguson and a community rally was being organised for the weekend.

Only problem was, Ferguson had not set foot in the town.

"I think people need to take a deep breath and realise it is rumour-mongering because we cannot be any clearer - he is not in and is nowhere near the Cessnock electorate," Cessnock MP Kerry Hickey said.

The rumours began on Tuesday after concerned residents began repeating false reports of the apparent sighting of Ferguson inside a supermarket on Monday afternoon.

Reports followed that Kurri Kurri Primary School had been locked down and pupils told not to go the toilets on their own.

A Department of Education spokesman dismissed this, telling The Herald there was no such "lockdown" nor were there any plans in place for fears Ferguson was living nearby.

A community rally at Weston, apparently organised by a woman claiming her two children were nearly abducted in an unrelated incident, was linked to the rumours on social networking website Facebook.

The Facebook page, called STOP Dennis Ferguson IN HIS TRACKS WE DON'T WANT A PEDOPHILE IN OUR HUNTER!, was still attracting comments, even after senior police publicly dismissed the Ferguson reports.

Police and community leaders criticised radio reports on the rumour, saying they had added fuel to the fire.

"I don't appreciate irresponsible reporting of these things," Central Hunter local area commander Superintendent John Gralton told The Herald.

Superintendent Gralton said Ferguson had not stepped outside his Sydney suburb, let alone decided to choose Kurri Kurri as a new home.

With the hysteria growing on Tuesday afternoon, Ferguson's case worker visited him at home to make sure he hadn't slipped away. He hadn't.

The case worker had to make the same trip last week after a similar rumour had started in a Victorian town.

"If someone has had some form of sighting of Denis Ferguson [in Kurri Kurri] it is an incorrect identification," Superintendent Gralton said.