• Passenger make their way off off the Quantas flight in Singapore
Ulf Waschbusch saw debris pierce the wing of the Qantas A380 shortly after take off following a refuelling stop at Singapore.
None of the 433 passengers or 26 crew onboard were injured but Qantas grounded all of their A380 fleet after the incident.
The Foreign Office said a number of Britons were on the flight and are currently receiving consular assistance.
Mr Waschbusch told ITV's Daybreak: "About five minutes after take off from Singapore I heard a loud boom noise on my left hand side so I immediately look out of the window at that point.
"I saw pieces of the engine, number 3 engine, fly off the wing through the wings itself and short bursts of flames for about a second or two at that time.
"It was one of the scariest things I have ever seen on an aircraft."
He added: "It's a little bit like a Hollywood movie that you think you are watching but you are watching it outside of the window, rather than on the telly. It was a really scary sight."
The plane was forced to dump fuel and return to Singapore's Changi Airport before making an emergency landing.
A Qantas spokesman said: "A Qantas A380 aircraft operating QF32 from Singapore to Sydney experienced an engine issue soon after take off and returned to Singapore.
"The aircraft had 433 passengers and 26 crew on board. In line with procedure, the pilot sought priority clearance for its return to Singapore. The aircraft landed safely at 11.45am local time."
Media and eyewitness reports initially suggested that the aircraft had crashed after an explosion was heard and large amount of debris from the jetliner was found strewn over western Indonesia.
Images taken of the jet after the emergency landing reveal that one of its giant engines has been badly damaged.
The front half of the engine appears intact but the rear half is charred and burned with the metal work exposed.
A full-scale investigation will now take place into how and why the "uncontained" engine fault occurred.
The Rolls-Royce engines are reported to have been made in Derby, England.
A spokesman for Rolls-Royce said: "The investigation is at an early stage. We are aware of the situation and are working with our client."
Qantas operates six A380 aircraft which have been grounded while investigations take place.
They are the biggest passenger aircraft in the world and have a relatively good safety record.
Qantas chief executive Alan Joyce said all affected passengers were being put up at hotels in Singapore, before a replacement aircraft could fly them to Sydney.
A spokesman for the Foreign Office said: "We can confirm that British nationals were on board the flight. There are no reports of injuries.
"Consular staff from the British High Commission in Singapore are at the airport and offering consular support to British nationals."