The signage is temporary and was put in place on the advice of the Department of Primary Industries following "unusual" shark behaviour in the area.

The juvenile shark was filmed by fisherman Clinton Bambach and posted on the Newcastle Herald's website on Friday.

A mother whose two-year-old daughter was splashing in the waters of Lake Macquarie on Sunday said she was very shocked to see the footage of a great white shark so close to shore.

Sheena Macourt, of Lambton, was at a birthday party held at Croudace Bay.

Her daughter Varie-Estelle was one of four young children in the water.

"It's pretty scary knowing our kids have been in the water," she said.

It was the family's first visit to the lake and they had planned to return.

"There were lots of people in the area. There were people in the water," she said.

Ms Macourt said she had since heard there had been an increase in shark numbers. "We will go back, but we will stick to the shore," she said.

Long-term Belmont resident Glyn Matthews said he believed shark numbers had increased in the lake and an attack on a human was inevitable. "I am dreading the thought, but there will be a shark attack soon," he said.

He said people were becoming too afraid to go into the water due to the number of shark sightings in recent years. He has long been calling on Lake Macquarie Council to install netting at existing lake baths and to recommission baths at Belmont.

In February 2012, the council considered concerns raised by the public about sharks in Lake Macquarie, in particular a call for shark nets in Belmont baths.

The council resolved not to proceed with the nets.

Yesterday, a spokesperson for the council said the council's position had not changed and "no further action is proposed to investigate or install any form of netting at areas controlled by council."

Jeff Jansson, a semi-retired environmental scientist from Coal Point, said he did not accept shark numbers had increased significantly in Lake Macquarie.

Mr Jansson led the Lake Improvement Project that improved water quality in the lake. He said between the 1960s and 1980s water quality within the lake was at its worst and this led to a depletion in marine life.

The improvement of water quality and a ban on commercial fishing on the lake from May 2002 had seen fish and shark numbers return to pre-1960s levels.

"There is no data to suggest shark numbers are increasing," he said.

He attributed an increase in reported sightings to mobile phones.

"Everyone has a camera now," he said.

He encourages people to continue to enjoy the lake.

"We can't wrap ourselves up in cotton wool and not enjoy it," he said.