Abi Butler was at her beachfront property in Pauanui on the eastern coast of the peninsula when her eight-year-old son spotted the cloud formation about midday a kilometre offshore.

"He said 'there's something really weird in the sea - I think it might be a tornado'," Ms Butler said.

Ms Butler said it was headed towards nearby Shoe Island, but briefly changed course and headed for Pauanui, leading her and her family to close the doors during a "brief moment of panic".

"It was gaining a lot of momentum - more and more water was churning up."

She said a number of boats including a yacht were very close to the funnel but nothing appeared to be directly in its path.

After five or ten minutes, the formation "ran out of steam - thank goodness".

MetService meteorologist Claire Flynn said funnel clouds like this one are fairly common, and are usually associated with severe thunderstorms.

Funnel clouds which touch the surface of water become waterspouts, while those which touch land are considered tornadoes.

Generally, the clouds are "nothing dangerous" and are usually quite short-lived.

https://www.tvnz.co.nz/one-news/new-zealand/brief-moment-panic-funnel-cloud-heads-family