Jackie Smalley, head of Anns Grove primary in Sheffield, told the General Teaching Council for England that she also saw two other children falling dangerously close to the heater.
Ms Smalley observed two lessons taken by the teacher, Heather Wheeler, and said classroom procedures were unclear and the environment was not conducive to learning.
When a supply teacher was drafted in as sickness cover, she said, there was a marked improvement in children's behaviour. "Quite simply it was like a different class," said Ms Smalley.
Mrs Wheeler's contract was terminated in March 2003 after capability procedures and an inspection at the school which graded her teaching as unsatisfactory.
Last Friday, she appeared before the GTC accused of professional incompetence.
Mrs Wheeler was also accused of failing to provide quality teaching to the detriment of the attainment and progress of children in her class and of not using the school's planning and assessment systems.
She has yet to give evidence but Jim Tindall, her representative, said that the Office for Standards in Education inspection which said the school had serious weaknesses was conducted before she started work in January 2002.
Mrs Wheeler was teaching key stage 2, identified as an area of weakness in the school, and Mr Tindall suggested to the head that this was not an ideal placement for a new teacher.
He said Mrs Wheeler had suffered a litany of personal problems and had taken time off for stress-related illness and been referred to the occupational health department.
This was partly down to a difficult relationship with the previous head of Anns Grove.
Mr Tindall said none of the classroom observations carried out on Mrs Wheeler had identified any incidents which had put children into physical danger.
The case was adjourned.