A handful of the 54 people on a draft witnesses list have been assigned pseudonyms and granted permission to give evidence before just the coroner, lawyers and court staff.

The inquest into William's disappearance is being held five years after the three-year-old vanished while playing at his foster grandmother's home in Kendall on the NSW mid north coast.

Deputy state coroner Harriet Grahame on Tuesday said she faced a difficult balancing exercise after a media company argued the court should remain open or, alternatively, evidence should be released in redacted transcripts.

Public scrutiny of the court and its processes was an important factor in delivering justice, the coroner said, but publication had the potential to frustrate its operation.

"It may seem unusual (to close the court) ... but it is a regular process," Ms Grahame said.

"Not on a daily basis but it happens from time to time. Closing the court is a difficult step but it is sometimes necessary."

The Nine Network and Nine newspapers were supported in their application by a lawyer representing a previous person of interest in the case.

Peter O'Brien labelled the secret hearings "perplexing and unreasonable", adding he'd been prevented access to the court orders explaining who and why some witnesses would be heard behind closed doors.

"This should be as open as possible," the lawyer said.

Counsel assisting the coroner Gerald Craddock argued while it was frustrating for lawyers and others, the court needed to be closed in some circumstances.

The lawyer representing the NSW Police commissioner also opposed Nine's application.

After the decision, the court heard about a "creepy" service station worker who helped in the search for William days before he was arrested for sexually abusing intellectually disabled men.

SES volunteer Robert Donohoe was sleeping in his van at the local pool or the Kendall showgrounds and working at a nearby petrol station in September 2014, his former boss told the inquest.

Sharon Starr, who ran the Woolworths petrol station at Lakewood, said she couldn't fault his work but she didn't warm to his demeanour.

"Creepy," she said of her former casual employee.

"The older customers liked him. He did his job."

But she said he did odd things.

Donohoe kept chickens in his van on occasion, bought an ink stamp to stamp the hands of children coming into the shop and once brought a lit candle into work and placed it in a back room..

"Had there have been a leak in that equipment, the vapours would have been in that room and the whole place would have exploded," Ms Starr said.

On September 16, 2014, after helping the SES search for William, Donohoe was arrested and charged with sexually assaulting two cognitively impaired young men living in the Taree area between the late 2000s and 2014.

He was jailed for a minimum of three years.

Police in 2018 searched Donohoe's van, which by that stage was covered in dust in a shed at his parents' home.

Donohoe is expected to address the inquest at a later date.

The inquest was held behind closed doors on Tuesday afternoon. It is expected to open again sometime on Wednesday.

Australian Associated Press