A man has described flames as big as a house, as he rescued a yachtie from a life raft after his boat burned and sank off the coast of Hawke's Bay

The Rescue Coordination Centre was alerted to an emergency beacon activation about five nautical miles north east of Cape Kidnappers, just before 11.30am yesterday.

Kyle Sykes was fishing with two others when they first spotted some smoke, and then followed a helicopter to pull off the rescue.

He says they then pulled the yachtie, who was in and out of consciousness, aboard their boat.