Three Belgian crew members died when their fishing vessel capsized 11 miles off Beachy Head, East Sussex.
A merchant ship spotted the fishing boat 11 miles off Beachy Head
Coastguards rescued a 19-year-old man, a nephew of the boat's captain, who was taken to hospital in Eastbourne after the alarm was raised on Wednesday.
It had been thought that one man might be found alive after knocking was heard inside the upturned hull of the vessel.
But after three dives by a Royal Navy team, the noise was found to be gear hitting the side of the boat.
The Zeebrugge-registered Noordster Z122 overturned in a busy shipping lane after it snagged its nets on Tuesday at about 1700 GMT.
Emergency teams were called out just after 0830 GMT on Wednesday when the 19-year-old was seen clinging to the hull.
He was taken to hospital suffering from shock and hypothermia, and was due to be released on Wednesday.
Two members of the family-run fishing business were confirmed dead on Wednesday morning.
A specialist Royal Navy team from Portsmouth made three "hazardous" dives in an attempt to find a survivor, but a third person was confirmed dead on Wednesday afternoon.
'No distress calls'
The rescue team included four lifeboats, a coastguard helicopter, a Royal Navy warship and several merchant vessels.
A Flemish-speaking coastguard interpreter has interviewed the survivor.
A Maritime and Coastguard Agency spokesman said: "It must have been pretty traumatic for this poor lad."
He said no distress calls were made. Other vessels would have seen the boat on their radar, but would have been unaware of the incident while it was dark.
The HMS Severn, a fisheries protection vessel, was on standby at the scene on Wednesday evening.