Phill Loader and his 16-year-old grandson Caleb spent 10 minutes drifting in their dinghy on Thursday afternoon as the two-metre shark ghosted alongside them.

The encounter was in shallow water, 80 metres from the Belmont 16ft Sailing Club, and ended when Mr Loader and Caleb grew "uncomfortable" and turned back to shore.

"It kept coming back and swimming alongside of the boat and at one point, he turned on his side to have a look at us," Mr Loader, 60, said. "This shark was doing all the things people fear they do. This was like something from a movie."

Sydney Aquarium aquarist Martin Garwood confirmed the shark was a great white (Carcharodon carcharias) based on the anglers' photos.

"It appears to be a juvenile of about one to three years old," Mr Garwood said. "It's really unusual to see this species inside a headland like Lake Macquarie. They are usually coastal/pelagic."

In 50 years of swimming in and boating on the lake, Mr Loader, of Belmont North, said he had seen sharks in it "maybe once or twice" near the Swansea channel.

He and his mates used to have swimming races off the sailing club. Not any more.

"I wouldn't be doing any swimming in the lake whatsoever after this," he said.

"I'm not comfortable letting any of my grandkids swim in the lake any more."

Jason Nunn, from Fisherman's Warehouse at Marks Point, said a great white's stare was an unforgettable experience.

"They eyeball you when they pull up beside the boat. They are a very intimidating fish," he said.

Mr Nunn said sightings of the shark, which was probably attracted to the lake by large schools of tailor, had been reported since the June long weekend.

"There were some guys drifting for flathead in about three metres of water near Swansea Gardens Caravan Park and it just buzzed them on the Saturday of the long weekend," he said.

Its dorsal fin was seen about 50 metres from swimmers at Coon Island the next day.

"There's no way I'd be swimming in the lake. I've got no doubt it's looking for a decent feed," Mr Nunn said.

He said the shark may have taken over the territory that an aggressive seal had occupied around the island until relatively recently.

Sailability, a group for disabled and disadvantaged people, launches about a dozen boats on that part of Lake Macquarie four days a week.

A larger regatta is planned for next month.

Belmont 16ft sailing co-ordinator Danny Anderson said the club safety policy was to bring all boats back to shore whenever someone saw a shark.

"I don't know that we'd change that or else we'd never go, would we?" Mr Anderson said.

The number of shark sightings on the lake had increased markedly in the past five years from virtually none, he said.

"Though I sail every weekend and I've only ever seen a few."

Lake Macquarie shark sightings

■February 2004  A three-metre bull or whaler shark is sighted  near a group of children at Belmont Bay.

■February 2004  A 2.5m  shark passes under a  sailing boat  500m from Belmont 16 Foot Sailing Club.

■March 2004 A shark fin appears only a few metres behind a wakeboarder in Crangan Bay.

■April 2004 A 2.5m  bull or tiger shark surfaces next to a   runabout near the Cockle Creek boat ramp.

■July 2004   Scalloped hammerheads measuring 1.8m and 2.5m  are caught near the Eraring power station water outlet.

■October 2005 A  1.8m  shark is cited  ‘‘within jumping distance’’ of the rocks at Reids Reserve, Swansea Channel.

■August 2009 A 2m   hammerhead  is caught  near Eraring Power Station.

■July 2011 A 2.7m  hammerhead shark beaches itself at Myuna Bay. 

■August 2011 A 1.5m   hammerhead shark is found dead at Myuna Bay.