Andrew McGregor was trying to catch toad fish with a net in the mouth of Candlagan Creek with his children and a nephew, but instead caught the octopus.

The small octopus, which has iridescent blue markings when it is about to deliver its toxin, is potentially deadly.

"I saw it and thought it was a small squid, so I caught it in the net," Mr McGregor said.

"When I put it in the bucket, it turned yellow and bright blue.

"That is when I thought it might be a blue-ringed octopus."

Mr McGregor said they were in knee-deep water at the time.

"We were surprised to find that it was a blue-ringed octopus, we didn't think they were down this far south," he said.

"We holiday at Rosedale regularly and have never seen one here before."

He said he was shocked to find it in a place so many people swim at.

"During summer, you can see over 50 kids playing in this lagoon," Mr McGregor said.

"If kids didn't know what it was and poked it, like the tend to do, it could be deadly.

"It would be good for people to know that there are blue-ringed octopus in this lagoon and not just in rock pools."

Mr McGregor said signs should be put up around rock pools and lagoons on the South Coast to warn swimmers about the deadly animals.

"My children had been playing in that water for about an hour before we caught the octopus in the net," he said.

"It was brown and easy to catch."

The family reported the find to NSW National Parks and Wildlife.

Mr McGregor thought a response from national parks was "unsatisfactory, considering how deadly they are".

The spokeswoman said the species was common on the NSW South Coast, though usually hidden amongst rocks and rarely seen.

"They will bite if provoked but, like most animals, they prefer to try to get away from the threat," the spokeswoman said in an email to the family.

"Perhaps it got into the lagoon due to a storm."

The Bay Post