The aircraft was engaged in dual instructional circuit training. On what was probably the fourth circuit, the aircraft was observed to land heavily on runway 35 and then to climb away to the N. When the aircraft reached a height of 400-500 ft a witness heard the engine noise cease abruptly and saw the aircraft enter a nose-high, yawing turn to the left. The left wing dropped as the aircraft approached a W heading and the aircraft entered a spiral dive which continued until it collided with the ground. There was no apparent attempt to recover from the spiral. The weather conditions at the time of the accident were fine and cool with a light wind blowing from the N. An examination of the wreckage failed to reveal any pre-existing damage or fault which might have contributed to the accident. However, the left ignition switch was found to be in the 'off' position and propellor damage was consistent with the engine being stopped at the time of impact. This evidence suggested the left ignition switch may have been inadvertently knocked to the 'off' position during emergency actions following a simulated engine failure, resulting in the engine stopping. The initial heading change after the abrupt cessation of engine noise, was consistent with an attempt to turn back towards the runway. There was no evidence found of either pilot having been incapacitated during the flight. It could not be determined who was controlling the aircraft at the time of the power decrease, or why the aircraft was handled in a manner which led to a loss of control. Recovery action may have been impeded by the shoe of one of the pilots fouling the rudder pedal control mechanism.