A British traveller who survived the Luxor hot air balloon disaster was forced to watch as his wife and 18 other passengers were killed when fire engulfed their basket as they flew 1,000ft above the ground.

Michael Rennie – the only tourist to survive what was described as the worst catastrophe in the history of ballooning – managed to escape largely unharmed after the balloon encountered difficulties on a dawn flight close to the Valley of the Kings in southern Egypt. But the other passengers – including his wife, Yvonne, and Joe Bampton, 40, who later died of his injuries – were trapped when the balloon lurched up into the sky following an attempted landing.

Mr Bampton and his Hungarian-born partner Suzanna Gyetvai, 34, both from Clapham, London, were confirmed dead last night. Witnesses described seeing tourists leaping to their deaths, their clothes burning as they fell. Doctors at Luxor International Hospital said that many of those who died suffered severe burns and massive internal injuries. "Everybody in the village was crying after what we saw," said Hussein Yasin, a 40-year-old village teacher who spoke to The Independent shortly after the accident.

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Mr Rennie and his wife had been staying at the five-star Sonesta St George hotel in Luxor as part of a Thomas Cook package holiday. In the early hours of yesterday morning the couple set off to one of the balloon launch sites amid the villages and sugar cane fields on the west bank of the Nile. After meeting their fellow passengers – who included tourists from France, Belgium, Hungary, Hong Kong and Japan – they lifted off with their Egyptian pilot into the sky above the patchwork of farms and pharaonic monuments below.

Eight other balloons also set off at the same time but shortly after dawn, at around 7am, one encountered difficulties. Last night there were conflicting reports about exactly what happened, but state investigators said a fire erupted in the balloon's basket after landing ropes became tangled around one of its gas tubes.

Last night, amateur footage emerged of the incident, showing black smoke appearing from the base of the balloon. Within 20 seconds flames had spread upwards into the canopy causing it to plunge straight down from the sky in a trail of smoke and fire.

One of the passengers – possibly Mr Rennie – managed to escape by leaping into the field below when the balloon was around five metres from the ground.

"I saw one person jump out," said Mr Yasin. Investigators described the balloon shooting upwards sharply as hot air rushed into the balloon, which by this stage was unbalanced. At an altitude of around 1,000ft one of the gas canisters exploded, sending it plunging down to where it landed in a sugar cane field. Some of the passengers leapt to their deaths on the way down, as jets of flaming gas engulfed the wicker cabin. Others appear to have remained trapped in the balloon as it careered into the cornfield below. In all 19 people were killed: nine from Hong Kong, four from Japan, two Britons, two French nationals, a Hungarian and an Egyptian.

At the crash site yesterday, a single white Nike trainer embedded deep in the mud was one of the only traces of the victims amid the mangled remains of the passenger basket. A few yards away were the discarded medical gloves used by doctors who vainly tried to save the lives of the passengers after arriving on the scene.

Witnesses described the surrounding farmland as being littered with bodies.

Apart from Mr Rennie, only the Egyptian pilot survived. The pilot, who had been working for the balloon's operating company, Sky Cruise, reportedly suffered 60 per cent burns and was later transferred from the hospital in Luxor to a unit in Cairo.

Mr Bampton underwent five hours of surgery in Luxor, with surgeons attempting to treat a series of severe abdominal wounds, but he could not be saved. According to Dr Mohammad Abdullah, head of the emergency ward, the man probably fell from a height of around 50 metres.

Luxor has suffered air balloon accidents in the past. In 2009, 16 tourists were injured when their balloon hit a mobile phone tower.

But yesterday's tragedy could not have come at a worse time for Egypt's beleaguered tourist industry. Authorities decided to suspend balloon flights in Luxor following the accident, representing yet another blow in a town where shopkeepers and tour guides have seen their profits decimated by the consequences of the 2011 uprising that swept former President Hosni Mubarak from power. "Tourism had been beginning to pick up again," said local agent Sameh Roshdy.