A Blenheim man who used to own the launch named Tarapunga, which went up in flames near Nelson yesterday, said he was sad to see the boat destroyed.
The launch caught fire about 12.45pm about 5 kilometres off Pepin Island.
A man and a woman who were on board, and their cat, took sanctuary in a dinghy and were rescued by a fishing boat.
Steve Liverton and his partner Kim Delisser lived on the 23 metre (72 foot) launch in Picton for 5 years.
They sold the boat in December 2012.
During the time they owned the launch, Mr Liverton and his partner restored it.
"A lot of blood, sweat and tears went into that," he said. "It's a bit sad to see it's gone now."
Harbourmaster Dave Duncan said the fishing boat Aukaha was the first boat to reach the couple and the crew did an "amazing job".
"They were instrumental in effecting this rescue."
They sent out a smaller Zodiac boat with three crew. The crewmen helped the couple into their boat and later helped the coastguard and harbourmaster's vessels fight the fire, he said.
A police spokeswoman said the owner said the fire appeared to start in the front of the wooden boat near the exhaust system. Attempts were made to salvage the launch, but it had two holes in the side and was taking on water.
It was towed several kilometres off Pepin Island and sunk in deep water, she said.
While the couple was lucky to get away with their lives, they had lost all of their possessions which had gone down with the boat, she said. They were being treated for smoke inhalation at Nelson Hospital last night. The SPCA is understood to be looking after the cat.
Acting Sergeant Mal York, of Nelson, said several volunteers and organisations rushed to help, including the coastguard, fire service, police and private and commercial vessels.
The couple had been offered accommodation by one of their rescuers, he said.
"They were very grateful for the efforts of everyone who came to their help and asked that their thanks be passed on to all involved," he said.
The Tarapunga was built in 1942 in the United States and worked for many years as a harbour defence launch in the United States and later served as a harbour defence launch for the New Zealand Navy.
It was also used for extensive survey work all around New Zealand.
- The Marlborough Express
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