Owner and sole occupant David Everdell from Sydney was on board and heading down river when the fire started.

Scott Maclean from Moss Vale was waterskiing nearby with his family when he noticed smoke coming from the boat, known as an Adams sloop.

“We saw the smoke and then saw the man yelling. My 16-year-old son swam over to the yacht and handed the guy a fire extinguisher,” Mr Maclean said.

“The extinguisher did nothing to slow the fire so we told him to jump overboard.

“He did and we picked him up and took him to shore.”

Police and firefighters arrived on the shore a few minutes after the fire started but were unable to reach the yacht. The vessel’s mast had fallen over and become stuck in the river bottom holding the boat in place against the tide and wind.

A number of explosions were heard as the vessel burned, spewing thick black smoke into the air.

Mr Everdell appeared uninjured but may have suffered smoke inhalation and was taken to Shoalhaven Hospital by ambulance paramedics.

He was heard to tell police the boat was all he owned in the world and he had been living on board.

“Thank God I wasn’t out at sea,” he told police at the shore.

Mr Everdell had built the yacht over about four years.

Rick Wales, who lives at Bolong, saw the smoke and raced down to the river.

“The guy had already been rescued when I got to the shore. I just heard him yelling out ‘It’s on fire’.

“There wasn’t much anyone could do – it went up in a matter of minutes.”

Firefighters were eventually able to access a nearby vessel from which they pumped foam onto the yacht to smother the fire.

There were concerns about the diesel fuel tank and gas bottles on board.

A Marine Rescue Shoalhaven vessel towed what was left of the yacht closer to shore so firefighters and a hazardous materials crew could contain the blaze and any chemicals on board.