NEW YORK, NY — A Manhattan waiter was pushed to his death down a manhole after trying to play peacemaker between his pal and the man's girlfriend, police sources said yesterday.

Keith Masters, 47, told cops his friend and neighbor Kyle McGarity, 25, accidentally fell 20 feet down the manhole and into scalding water near the South Street Seaport during horseplay Saturday.

McGarity landed in a pit of boiling water. He died of burns over 60% of his body.

But authorities charged Masters with second-degree murder Sunday, and yesterday sources gave a detailed account of the alleged brawl that ended with McGarity being scalded to death.

The men, who live in the same South St. building, were walking with Masters' girlfriend around 3:30 a.m. after a night of drinking when the couple began arguing, sources said.

"The argument gets a little loud and threatening. [McGarity] decides to intercede on her behalf and goes and puts his arm around her," said a police source.

Wooden barriers and a 100-lb stack blocking the hole were moved intentionally, police say.

"This infuriates [Masters] even more. He charges up behind the victim and puts him in a bear hug and pins him up against a wall, but [McGarity] breaks free and they start rolling around," the source said.

Sources said Masters' girlfriend, whose name wasn't released, told police steam from the manhole covered the street and she could not see what happened next.

Investigators said wooden barriers and a nearly 100-pound vent stack were blocking the manhole at Fulton and Pearl Sts., and they had to have been removed intentionally.

McGarity landed in a pit of boiling water. He died of burns over 60% of his body.

Masters' lawyer, Phyllis Mingione, said, "It's a tragic accident."

Neighbors described Masters as a strapping but gentle man who sometimes drank too much. Masters, who worked at the Fulton Fish Market and was a part-time bartender, became fast friends with McGarity, who had just landed a job as a waiter at a local restaurant, they said.

McGarity grew up in Holland, Ohio, and moved to New York a couple of years ago.

"He loved New York," said Patricia Yunker, 54, who lives next door to McGarity's family home. "He was just such a sweet-spirited kid. Everbody loved Kyle. Kyle was a friend to everybody."