The Greymouth-based 22m Honey Dew II sank in shallow water 500m off Ship Cove, north of Haast and just south of Knights Point. Dr Gerry McSweeney, of Wilderness Lodge, Lake Moeraki, said he was just preparing for work about 6.30am when deerstalker Luke Potts arrived to report he had seen red flares at sea.
Dr McSweeney called emergency services ''because you don't see red flares out to sea just by chance''.
He then drove to Knights Point where he could see the lights of a fishing vessel. It turned out to be Grace Mary, skippered by Nathan Sulman.
He called Haast Search and Rescue co-ordinator Kerry Eggeling who told the Otago Daily Times yesterday he had heard ''absolutely nothing'' on his marine radio at that point.
However, he began making his own calls.
''I called several people and finally got hold of the Grace Mary, which was standing right beside the [Honey Dew II].''
Grace Mary skipper said Honey Dew II was sinking. The crew was still on board ''but they didn't think she was going to survive''.
Mr Eggeling went to the beach at Ship Creek and he and garage owner Eamonnd Johnston ''waited and watched until she actually rolled over''.
''She rolled over just before she got into the breakers.''
Mr Eggeling said he was told ta fire had knocked out the trawler's bilge pumps and radio.
''They had nothing. They lost all their electrics and electronics, so they were buggered.
''We couldn't talk to them. We could only talk to the Grace Mary.''
Mr Eggeling said the four crew got off Honey Dew II about an hour and-a-half before it sank.
The weather had been ''very rough'' during the night, with thunder, lightning, wind and heavy rain, but the sea was much calmer by the time the fishing boat sank.
All that was visible of the Honey Dew II when the ODT flew over at mid-morning was the tip of the mast and a line of debris being swept north on the current.
The boat is believed to have had more than 2000 litres of diesel on board and some fuel could be seen on the surface.
However, Mr Johnston expected the diesel would disperse quite quickly in the turbulent seas and the wooden-hulled boat would break up over time.
Honey Dew II is owned by Kelvin Fawcett, of Greymouth, and the skipper on board at the time of the fire was Ross Coppell.
Mr Fawcett said he had owned Honey Dew II for 26 years and the boat had undergone its four-yearly survey in November.
''You've got to bear in mind that this is a heavily-built ex-minesweeper for the English navy, so it'd be hard to sink it,'' he said.
Mr McSweeney said the hunter had returned to his lodge, stagless, yesterday afternoon to see how things had turned out.
''I said to him: 'Well, you've just saved four lives'.''
Mr McSweeney said he had also not heard marine radio ''chatter'' and wondered why the crew did not appear to have made an emergency radio call.
Maritime New Zealand media and communications adviser Michael Flyger told the ODT Honey Dew II had its ''safe ship management certification'' renewed in January following an inspection.
West Coast search and rescue co-ordinator Sergeant Sean Judd said the boat had caught fire but did not know how the fire started.
''As far as I'm aware ... they made no contact by radio. Little things like that we're interested to know why not.''
While police were expecting Grace Mary to bring the rescued crew to Jackson Bay yesterday afternoon, Sgt Judd confirmed last night it was heading for Greymouth and was expected there this afternoon.
