The Aquanaut sank in eight minutes
Twelve people have been rescued from the sea off Salcombe in Devon after their 40ft (12m) dive boat sank.
The divers from London let off a flare when their boat, Aquanaut, started taking in water, sinking in about eight minutes off Bolt Head on Saturday.
The divers were spotted by the crew of a passing yacht which took two on board while the rest got into a life raft. A lifeboat took them all into Salcombe.
The divers were with the Aquanauts Dive Centre, based in Plymouth.
The boat started taking on water so fast it overwhelmed the bilge pumps according to Aquanauts.
Ten of the divers took to a life raft and the remaining crew boarded the yacht, Dutch Angel.
The 10 divers, from Dive Wimbledon, and two instructors, were checked over and were all uninjured.
Trip organiser, experienced diver Howard Payne told BBC News: "It was the most hairy situation I've ever been in.
"Two of us were trapped in the cabin briefly as we tried to throw out lifejackets and we had to cut the life raft free.
"But no-one panicked and we are all fine."
He praised the lifeboat crew from Salcombe and the crew of the Dutch Angel.
"They were superb, without them it could have been a lot worse. We are very lucky."
The divers returned on Sunday to retrieve the boat's bell for the skipper.
A spokesman from Aquanauts said: "We are just glad everyone is okay and safe.
"It's at times like this it's nice to know that all our emergency procedures and training paid off, as the systems we have in place worked perfectly.
"We would like to thank the yacht Dutch Angel, who came to assist us, and Salcombe lifeboat for their help."
Details of the incident have been passed to the Marine Accident Investigation Branch.