We present photoionization models of high exitation gas in the Extende
d Narrow Line Region (ENLR) of NGC 1068. The ENLR line fluxes have bee
n calculated allowing for attenuation of the nuclear ionizing continuu
m as a function of distance from the central source. The diffuse conti
nuum emission from the low density gas is also included as an importan
t secondary source of ionizing radiation. The observed emission from h
igh excitation gas, in the ENLR of NGC 1068, is reproduced by assuming
the central luminosity to be 3.5x10(44) erg s(-1) between 10(14.6) an
d 10(18.4) Hz. The column density attenuating the central continuum is
N-h=10(22) cm(-2). The predicted reflected continuum from the gas loc
ated at a distance of 1.5 kpc is about 10 % of the observed extended s
oft X-ray continuum in NGC 1068.