It was the first time that Cutfield, a 51-year-old expert Kiwi sailor, had been questioned since being under investigation for suspected multiple negligent manslaughter and causing a shipwreck.
Lynch, his 18-year-old daughter, Hannah, and five others were killed.
Jonathan Bloomer, chairman of Morgan Stanley International, his wife Anne Elizabeth, Lynch’s lawyer Chris Morvillo, the latter’s wife Nada and chef Thomas were the other casualties.
The captain is being defended by lawyers Giovanni Rizzuti and Aldo Mordiglia, who left the conference room of the Domina hotel where their client was interrogated.
Prosecutors in Termini Imerese officially placed Cutfield under investigation on Monday.
Cutfield on Sunday was questioned by magistrates for two hours.
Fifteen people survived the shipwreck, including all crew members with the exception of the yacht’s cook, Recaldo Thomas.
During Monday’s two-hour-long meeting with State prosecutors, the skipper replied to questions including whether doors and hatches were closed and when the alarm was sounded after the Bayesian was struck.
Authorities think a localised and very powerful extreme-weather event called a downburst hit the yacht.
Under consideration were also the approximately 32 minutes between when the 56-meter-long superyacht started taking in water and when a red flare was launched from a life raft, investigative sources said.
Before working for Lynch, Cutfield is reported to have captained luxury yachts in the Mediterranean for years, having worked for an unnamed Turkish billionaire.
Cutfield and his wife Cristina reside at Majorca, where they got married last year.
Born near Auckland, he has been sailing since he was a boy.
He has been skippering luxury yachts for about eight years now.
State attorneys on Monday meanwhile also questioned the other crew members of the Bayesian.
ANSA has learned that they were also questioned at the Domina Zagarella resort where they are staying, and that more people could be placed under investigation in connection with the shipwreck.
The official probe opened into the captain’s potential responsibility in the accident was a key step for prosecutors to proceed with the autopsies on the seven victims.
The autopsy is to be carried out by the doctors of the institute of forensic medicine of the local Policlinico hospital, investigative sources explained.
The autopsies cannot be repeated, so those placed under investigation by judicial authorities will have to appoint their expert consultants.
Other crew members who might be placed under investigation could include the captain’s deputy and the person on watch on the night of the shipwreck, according to well-informed sources.
The issue of whether one of the yacht’s hatches or entrances were left open and whether the keel was raised, making the boat less stable, are considered as fundamental to the investigation.
The shipwreck has puzzled naval experts who believe a boat like the Bayesian should have withstood the storm or at least should not have sunk as quickly as it did.
The yacht has been described as unsinkable, unless it took on tons of water, by experts like Franco Romani, who works for the boat’s high-end manufacturer, shipyard Perini Navi.
The Bayesian was one of a series of “10 ships” - “a line that was more than consolidated,” he said, describing them as “boats that can do anything”.
Romani said he believed a large side hatch was left open because, “if you close everything, water doesn’t enter.
“In extreme conditions, the boat can roll as much as it wants but it doesn’t sink.”
Prosecutor Raffaele Cammarano is coordinating the investigation into the shipwreck.
The passengers had no time to escape because they were sleeping in their cabins, the prosecutor said.
The Italian fire brigade divers who recovered the bodies said, “We’re always called in for operations at the limit, catastrophic [events].”
“We go down 50 metres, we work in extreme conditions and at great risk, but we aren’t superheroes.”
The same men worked on the Costa Concordia disaster on January 13-14, 2012, in which 33 people died.
ANSA