Russell Berry, 41, remains in a critical condition in the Royal Melbourne Hospital after the incident in White Street early Saturday morning.

Homicide Squad detectives are investigating the incident, and friends fear the 41-year-old may die.

A friend who witnessed the attack said someone had jumped on Mr Berry’s head while he was on the ground.

Mr Berry was reportedly dead when paramedics arrived, but was been revived over about 40 minutes. 

It was unclear if he was stabbed, but the fight left four people in hospital with various wounds, with two people under police guard.

Jarred Dowdle and James Ferguson both ran for cover after two machetes were taken out following a dispute.

Mr Ferguson said it was a fight that never should have happened, with the two men taking offence to something that wasn’t even said to them as they walked past the units.

He said Mr Berry had been saying goodbye to a friend, calling him “Boo Boo”, which the two passing men had taken as a slight against them.

“It was a misunderstanding of mates saying goodbye to each other,” he said.

“People were walking past, intoxicated, at the same time.

“It got very out of hand.”

Mr Ferguson said one man had swung a bag at Mr Berry before the weapons were taken out.

“I was trying to get them to stop,” he said.

“It just went too far over such a little thing.”

The incident occurred on the footpath outside the unit he shares with Jarred Dowdle.

Mr Dowdle said those involved had turned on the pair after they tried to calm the situation down. 

Both men ran inside and locked the door to their home as one man smashed in a front window.

They were forced to flee the home amid fears they would also be attacked.

Police said five men were involved in the fight, with two men arrested on nearby Higgins Street before being taken to hospital and placed under guard. 

Bloodstains were still on fences, concrete, a drain pipe and window at the scene of the stabbing on Sunday afternoon.