Michael Rennie, from Perth, jumped to safety only to look on as his wife Yvonne was killed along with 18 other tourists on holiday in Egypt.
The 49-year-old ran to nearby houses to raise the alarm, but it was too late.
Mr Rennie suffered severe burns to his face and was taken to hospital along with the Egyptian pilot of the balloon, who is in a stable condition.
The details emerged as tour operator Thomas Cook defended its Egypt balloon trip arrange- ments amid safety concerns.
The firm had been continuing to use Sky Cruises, the company involved in Tuesday's crash and which was also involved in a balloon crash into the Nile in October 2011.
Today, Thomas Cook insisted that local firms offering balloon trips were fully licensed by Egypt's aviation authority.
After the ordeal, Mr Rennie made an anguished call to his wife's father and apologised over her death.
Her father William Harris, 63, described his son-in-law as a "broken man".
Details of his ordeal were revealed by a reporter on the scene in Luxor who tweeted: "Witnesses say Mr Rennie had run 200 yards along a track from where the balloon first touched down.
"He had seen the balloon rise up above him, with the basket and canopy ablaze - his wife Yvonne still in it. He shouted, 'my wife'."
It is understood the balloon was coming in to land after a dawn sight-seeing trip to the Valley of the Kings.
When it was only 10ft from the ground, a landing cable is believed to have snagged on a gas canister and a fire broke out on board.
This caused a blast which filled the canopy with hot air and sent the vessel soaring skywards again.
Mr Rennie and the pilot jumped out before the basket rose further into the sky, it was reported.
As many as nine people are believed to have jumped to their deaths from the basket, while the others died when it crashed to the ground after an explosion.
Joe Bampton, 40, from London and his Hungarian-born partner Suzanna Gyetvai, 34, also died in the accident.
Mrs Rennie had worked at Perth Royal Infirmary since June 2006. A spokesman for the hospital said she was a highly valued member of the radiology department.
Mr Rennie is a manager with construction firm Carillion.
An investigation has been launched into the disaster and all hot-air balloon flights in Egypt have been suspended.