A group of children were happily playing in the water at Paihia, cooling off from the hot sun - then someone yelled: "Shark!"
The kids fled from the water and, when they reached safety, turned to watch a dark grey fin carve through the waves.
Department of Conservation shark expert Clinton Duffy said the shark appeared to be a bronze whaler - which can reach up to 3.3m in length.
Mr Duffy said bronze whalers were primarily fish eaters and there had been no confirmed attacks by this species on swimmers in New Zealand.
One holiday-maker managed to catch yesterday's encounter on her camera.