Four cling to chilly bin in sea after shipwreck

Two children clinging to a were among four people rescued after their boat sank off Sydney's northern beaches. Photo / Supplied Sky News

Two boys and their dads clinging to a chilly bin in the waters off Sydney could have been lost at sea for days if it wasn't for an emergency rescue beacon, police say.

Their boat sank within one minute in relatively calm seas, about 10km off North Head, shortly after 8am AEDT on Thursday.

Riley Smiles and Ryan Matthews, both 11, were asleep on swags on the boat's flybridge when Riley's father Scott noticed black smoke coming out of the exhaust about three hours after they had left Botany Bay on a fishing trip.

Mr Smiles made sure everyone had a lifejacket as water filled the engine bay, grabbing an emergency beacon and a chilly bin before they jumped into the water.

"Just something to float on. I knew we'd be in the water," he told reporters shortly after the rescue.

"We were beyond the point of return. The boat was almost vertical."

The EPIRB beacon was activated at 8.30am (AEDT) and they were found by a Westpac Rescue Helicopter 45 minutes later, 9.2km from North Head.

NSW Police's marine area commander Superintendent Mark Hutchings said the distress beacon gave an exact location, ensuring rescuers could find them within an hour.

"It's the difference between rescuing in 45 minutes and maybe one or two days," he told AAP.

Mr Smiles said he knew they would be okay when the distress beacon was set off.

"The EPIRB, as soon as I set that off and it started to beep, I knew that we'd been pretty well okay," he said.

He praised the courage of the two boys.

"They're pretty good boys, they've done a fair bit," he said.

"My little boy's spent five years on a boat, so he's pretty well (experienced)."

The police were also impressed.

"They've been through quite a dramatic experience but they were in surprisingly good spirits when they got here," Supt Hutchings said.

The other dad, Rick Matthews, sustained burns to his chest and abdomen from fuel in the water, and cuts to his leg from a fishing hook, and was being treated in hospital.

All four were rescued when the helicopter dropped a life raft into the water, before a water launch arrived a short time later.

Rescue helicopter chief executive Steve Leahy said the boat had sunk very quickly, leaving no signs of debris.

"It's just an amazing story," he told Sky News.

With the boat 65 metres below the water, Supt Hutchings said it would probably never be known what caused the sinking.

- AAP