Revellers scattered and police and ambulances rushed to the resort beach when an explosion shocked onlookers about five minutes into the display after 9pm.

“The fireworks were going off as you’d expect and then suddenly there was a hell of an explosion. Next thing the barge was on fire,” said Terrigal resident Kevin Andrews.

Another spectator said the huge explosion “sort of hit you in the chest” and left the barge “well and truly alight right in front of the surf club”.

Two men operating the fireworks from a barge about 150 metres from shore in front of Terrigal Surf Club were taken to hospital by ambulance for treatment of minor injuries after diving into the water and being rescued by emergency personnel in watercraft.

Thousands lining the beach as far north as Wamberal were evacuated after concerns about the stability of the remnants of the barge in choppy conditions.

The Terrigal fireworks display was promoted by former Terrigal Surf Club cafe owner Dave Lambert who launched a community fundraising campaign to return New Year’s Eve fireworks to the beach resort town, years after the last display was held.

Mr Lambert said Terrigal had turned into a “ghost town” on New Year’s Eve because of major fireworks displays at The Entrance and Gosford waterfront.

Mr Lambert set a fundraising goal of $25,000 to run the event, which included at least $3000 to a pyrotechnic company to build the barge from which the fireworks were displayed.

The fireworks display and New Year’s Eve event followed nearly a year of work to obtain Central Coast Council approval, police sanctions, insurance and other mandatory safety requirements.

In November Mr Lambert thanked the community and local businesses for their support, saying “If it wasn’t for the community rallying together with local businesses stepping up to donate and sponsor the event, it wouldn’t have happened”.