A TEENAGE boy is in custody after allegedly threatening a northern NSW caravan park employee with a knife and stealing cash.

Police say the 16-year-old entered the caravan park reception office on the Bruxner Highway at South Lismore at about 11.15am yesterday and threatened a female staff member with a knife.

He escaped on foot with cash and was pursued by a male staff member who was allegedly threatened with a knife, before the youth dropped an amount of money and ran away.

He was stopped nearby by police who allegedly found a knife and cash in his possession.

The boy has been charged with robbery armed with an offensive weapon and common assault and refused bail to appear before Lismore Childrens Court later today.