A New Year's Eve fireworks display ended with fears for the safety of thousands watching on the beach after a huge explosion caused a flaming inferno on the display barge about 150 metres from shore.

Crowds eager to watch the 9pm fireworks display on Terrigal Beach were evacuated after the barge caught alight, forcing the two technicians on board to dive into the water to escape.

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

"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.