The fast minesweeper Zane was moored in the mouth of Middle Loch on 7 December, next to Breese. At 0830, her log records "Sighted enemy submarine 200 yards astern of U.S.S. Medusa at berth K-23." This was, it appears, the first sighting of the midget submarine.
You can find out more about the Zane in the following Osprey book: