The plane was on a tandem skydive excursion over Lake Taupo when it suffered serious engine problems at an altitude of 1300m at around 12.15pm. The pilot called for an immediate evacuation, and bailed out along with six crew members who jumped to safety with their six passengers strapped to them as planned.

The drama comes just a couple of months after Lake Taupo was named as ‘Best New Zealand’ destination in TNT’s annual Golden Backpack Awards. The lake, on North Island, covers an area of 616sq km, and reaches a maximum depth of 186km. It is surrounded by forests, volcanic mountains and snowy peaks which draw millions of visitors every year. The area has been dubbed ‘nature’s greatest playground’, and is a popular centre for many activities including trout fishing, boating, kayaking, sailing, white water rafting, jet boating, skydiving, motor racing and bungee jumping.

It is understood that everyone on board the skydive plane walked away uninjured – the worst damage being scratches suffered by the pilot when he landed in a blackberry bush.

The New Zealand Herald quoted one man who told local media he heard a loud bang and then saw skydivers leaving the plane.

“It sounded like an engine blowing up. It would’ve been no longer than 15 seconds between the bang and when the skydivers started jumping out of the plane. It was amazing that they could get out. It’s amazing that they’re safe.”

Roy Clements, chief executive of trip organiser Skydive Taupo, said in a statement: “A skydiving plane encountered an engine problem shortly after take-off. All parachutes including the pilot exited the plane and landed safely.”

One witness told the Herald that the plane “conked out” off Waitahanui, a small village off the south side of the lake, before crashing into Rotongaio Bay. The incident took place in front of dozens of stunned onlookers, many of whom raced to put boats in the water to help rescue the parachutists.

Mike Richards, a spokesman for the Civil Aviation Authority, said it was a miracle that no-one had been killed.