WARNING: This article discusses suicide and may be distressing for some readers.

A heartbroken Australian expat has revealed the harrowing final conversation he had with Damien John Shaw in Bali just days before the Perth-raised father allegedly smothered his two young children to death and ended his own life.

The horrific murder-suicide at the Arca Bungalow complex in Legian unfolded on Sunday morning after Mr Shaw’s frantic wife — who had travelled to Jakarta four days earlier — received a chilling phone call from her 56-year-old husband.

In the background, she could hear her terrified four-year-old daughter crying and begging, “stop Daddy”.

When bungalow staff and neighbours later forced open the door, they discovered the lifeless bodies of the four-year-old girl and her six-year-old brother stacked on top of one another on the floor, alongside their father.

A close friend of the former seaman has recounted what was said during his deeply unsettling and final face-to-face encounter with Mr Shaw, just one week before the alleged double murder-suicide.

The friend - who wanted to remain anonymous - told The West Australian their final conversation was all about Mr Shaw’s financial, marital and mental troubles.

“You could tell he was struggling mentally,” the friend said.

“He was on his way to the book store at Bintang market to get a book for his daughter, he loved his kids, we would see them at the beach all the time and he took them to school every day.

“He didn’t drink or use drugs ... always said g’day.”

The conversation took a disturbing and desperate turn as the father began detailing the financial and marital stress he was under, suggesting a recent overseas venture had cost him $140,000.

Mr Shaw’s friend believes these pressures ultimately led him to spiral into a fatal mental health crisis.

“He said he wanted to kill himself, he had had enough,” the friend said.

“He was angry and frustrated... I told him not to do anything silly.

“He loved boxing and I said ‘lets train together. Call me. I’m happy to come catch up even if you just want to walk on the beach. If you need a hug mate, I’m here’.

“At that point he started to get upset and I could see he wanted to cry.

“Then he said he had to go, he went off to the bookstore and I will never see him again now.”

The tragedy has left his friend struggling to comprehend how a man who dedicated the past few years of his life to being a stay-at-home parent to his young children could commit such an unimaginable act.

In Perth, the tragedy has shattered the suburb of Melville where Mr Shaw — an out-of-work merchant seaman, according to his LinkedIn page — grew up.

The former Melville Senior High School student had spent 37 years working in the local maritime industry as an integrated rating crew member. On Monday, The West Australian visited the childhood home where Mr Shaw’s brother, Mark, still resides.

Visibly distraught and overwhelmed by grief, Mark Shaw declined to comment.

The tragic family history of the brothers — who appear to own various properties across Perth — reveals a trail of heartbreak.

Their father died when Mr Shaw was 15, they lost a brother and their mother recently died after an illness.

Neighbours described the family as private.

One neighbour, who lived alongside the Shaw residence his whole life and asked to remain anonymous, expressed disbelief about the incident in Bali.

“I haven’t seen Damien for years but he grew up right here,” he said.

“He was very private but never caused any trouble, we always exchanged pleasantries.

“When I heard the news I thought it was shocking.”

If you or someone you know is experiencing family violence, phone 1800 RESPECT (1800 737 732) or the Crisis Care Helpline on 1800 199 008.

Lifeline: 13 11 14.