At least one person died, and last night divers were in a race to find six still missing, including Mr Lynch and daughter Hannah, 18.
Footage shows lights on the doomed Bayesian vanish as it capsizes while moored off Sicily. The owner of the home overlooking the anchorage said: "In just 60 seconds you can see the ship disappear. Of about 20 cameras installed in the house, only one was not disturbed by the wind and the rain.
"You can clearly see what is happening. There was nothing that could be done for the vessel. It disappeared in a very short time." Experts said there was a slim chance any people in the wreck, which is on its starboard side 164ft down in the Med, could cling to life in air bubbles within the hull.
Engineer Nick Sloane, who led the salvage operation to recover the overturned cruise liner Costa Concordia in 2012, said rescuers have "a very small window of time to try to find people stuck inside with hopefully an air pocket, and they could be rescued".
He added: "You've got a maximum of two to three days to try to get someone out, so the next 24 hours are critical. If the yacht is on its side, it might have more air pockets than if it's upright. She's got quite a large keel, and that will deflect and put her on her side."
In 1997, British racer Tony Bullimore survived in an air pocket in his upturned yacht for four days after it capsized in the Southern Ocean. Rescuers were able to reach him as his Exide Challenger vessel had remained afloat.
Coastguards think the missing six are in the Bayesian. Vincenzo Zagarola said: "Our search and rescue activity by sea and air has gone on for around 36 hours.
Debris
"Of course, we do not exclude that they are not inside the boat, but we know the boat sank quickly.
"We suppose that the six people missing may not have had time to get out of the boat."
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