An equipment failure caused a "very experienced" diver to lose consciousness just before he resurfaced, an inquest heard.
Peter Dahle, 56, who then fell 70m to the ocean floor and died, had been diving near the Eddystone Lighthouse off the coast of Plymouth on 3 August.
Plymouth Coroner's Court heard Mr Dahle's dive handset cracked causing his breathing apparatus to fail.
Coroner Stephen Covell concluded it was an accidental death.
Paul Downs told the hearing he and Mr Dahle, from Plymouth, paired up to descend to a World War One wreck at around 11:45 BST.
Mr Downs said he got caught in a trawler's net as they descended and could "feel the panic rising", but father-of-two Mr Dahle rescued him.
Once they got to the bottom Mr Dahle signalled he had an issue with his handset computer, but seemed "unflustered" as he started his ascent with two other members of the group.
"None of us had any cause of concern that he had a serious problem," Mr Downs said.
"In hindsight he obviously did."
The group called the coastguard after Mr Dahle failed to resurface.
Coroners officer Graham Higginson said Mr Dahle's equipment showed the crack had probably been caused by poor maintenance and was not likely to have occurred as he disentangled Mr Downs from the net.
He said water seeped into the computer causing it to malfunction and for Mr Dahle to become gradually depleted of oxygen.
He said: "The root to unconsciousness is not immediate, it is a gradual shutting down."
Mr Covell said the British Sub-Aqua Club may want to review protocols around the buddy system in the light of the accident.