Two Newcastle fishermen had the scare of a lifetime on Saturday when a five-metre shark began circling their tinny before headbutting the engine as they were trying to get away.

Belmont resident Tim Watson, 24, captured footage of the close encounter which occurred half an hour off shore from Blacksmiths beach.

He and friend Allan de Sylva, 23, estimated the shark was a metre longer than their boat and only "half a foot" narrower than it.

"It felt like getting trapped in a room with an angry pit bull," he said.