The whale watchers became people rescuers, when the tour boat plucked three fishermen and a dog off a trawler just before it sank about 20 kilometres east of Newcastle.

"We didn't go out expecting that," said CoastXP's founder, Dominic May, who was skippering the 10.8-metre adventure boat, Atmos.

The tour operator, along with a crew member, was heading out with 20 passengers, when he heard over the radio that a trawler was taking on water. The vessel then lost power, and Mr May heard the word, "Mayday".

"It's the one call you don't want to hear, but you're prepared for it, if it does happen," he said.

Upon checking the coordinates of the stricken trawler, Mr May realised they were close - "we were within a few nautical miles" - and told the passengers that the tour had changed.

"I told them as politely as possible we'd be taking a detour," he said.

The whale-watching crew managed to stay in contact by radio with the fishermen, and as Atmos approached the trawler, Mr May noticed that the vessel was listing. The tour boat went to the stern of the trawler, and the three fishermen and the dog stepped on board - just in time. .

"I wouldn't give it 60 seconds when they were on board before [the trawler] sank," Mr May said.

Stunned passengers, including families, watched the trawler sink very quickly, disappearing into the depths.

"It's unbelievable how quickly water can engulf a vessel," Mr May said.

"I don't know 100 per cent if people realised what was going on, until they saw the boat sink, and there was no debating the severity of the situation."

Those rescued were physically okay, Mr May said, but were "really shaken up by the experience", with their "pride and joy" on the bottom of the ocean.

The trawler's skipper was highly experienced fisherman Murray Ham, and the boat was one he had operated for many years, Ellie K. It's believed one of those saved from the trawler was Mr Ham's son, along with a deckhand and the dog.

Through a fellow veteran fisherman and good friend, Brett Bollinger, Mr Ham passed on his thanks to the rescuers.

"He is very grateful to the blokes who got him and his crew," Mr Bollinger said.

Dominic May was relieved everyone was safe.

"I'm glad it was a safe and successful outcome," he said. "A couple of minutes [later], and it could've been another outcome.

"And I was just glad to be able to lend a hand."

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