Australian authorities have launched a high-profile investigation after a 95-year-old woman’s great-grandmother with dementia allegedly taken to a nursing home by the police.

The woman, identified by media as Clare Nowland, was tested on Wednesday after she was found with a steak knife at the nursing home in Cooma, about 300km south-west of Sydney.

She is in a critical condition in hospital, fading in and out of consciousness, sparking a public outcry over the incident.

Police were called to the nursing home after staff found Nowland wandering around the facility for several hours and took the knife from the kitchen.

Two officers spoke to Ms Nowland for several minutes, but when she failed to drop the knife and approached them, one fired a Taser, knocking her to the ground, police said.

“At the time she was Tasered she was approaching the police but it’s fair to say at a slow pace,” New South Wales Police Assistant Commissioner Peter Cotter said on Friday.

“She had a walking stance, but she had a knife.”

The officer who fired the Taser was taken off duty pending a “level 1 critical incident investigation,” a category of police reserve for exceptional cases where injuries lead to death or imminent death.

The homicide squad is involved.

“If a threshold is reached where it changes from being a departmental matter to being a criminal matter, we are certainly mature and transparent enough as an organization to do what needs to be done,” he said.

The incident was recorded on body cameras but it was not in the public interest to release the footage due to the ongoing investigation, Cotter added.

Ms Nowland, a mother of eight, celebrated her 80th birthday in 2008 by skydiving in Canberra.

She has reportedly lived in the nursing home for more than five years. Her relatives were at her bedside in hospital and had declined to comment, according to the Australian Broadcasting Corporation.

Mr Cotter declined to comment on whether the officer would face charges.

“I understand your question and I thank you for it, but also thank you for your question about criminal charges, they know where you’re going, but in absolute fairness to everyone involved here, I’m not going to talk about this specific officer and any criminal charges , he said.