A small New Zealand farming community was in mourning yesterday after a hot-air balloon clipped power lines and burst into flames, killing all 11 people on board. The accident at Carterton, north of the capital, Wellington, was witnessed by horrified locals and some family members, including two sisters who had bought the sunrise flight for their parents as a Christmas present.

The pilot, Lance Hopping, was preparing to land the balloon, with five couples on board, when it struck power lines just before 7.30am local time and turned into a tower of "sheer flame". One pair leapt out before the basket plummeted to the ground and crashed into a paddock. Their bodies were found about 100m from the site.

Only Mr Hopping, an experienced pilot who also owned the balloon, has been identified so far. Some of the bodies were badly burnt. A disaster identification team was called in yesterday as air accident investigators tried to determine what went wrong on a clear, still morning.

A Carterton resident, David McKinlay, was watering his garden when he saw the burning balloon overhead. "I couldn't believe what I was seeing. There were flames licking up the side of the basket, right up the guy-ropes," he told Television New Zealand. When the flames reached the canopy, the balloon plunged, he said. "There was a big, long, pencil-like flame maybe 20m long, heading towards the ground at a terrible speed. It was like a rocket coming down; it was unbelievable."

Mr Hopping was said to be an experienced pilot who was safety officer for the annual Balloons over Wairarapa event. He had more than 1,000 hours of commercial ballooning experience.