Bailey, a Yorkshire terrier and Chihuahua cross, was on the lead when he was pounced on by a black and white dog, believed to be a bull mastiff.
Owner James Stephenson was even bitten on his hand as he tried to release his pet from the jaws of the other dog, which was off its lead.
Bailey, who was four, was left with horrific back and stomach injuries, and his intestines were hanging out.
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James, 60, and wife Angela, 52, rushed Bailey to an emergency vet where he was sedated, but sadly died from his injuries.
The incident happened near the Metro station in Jarrow, at around 10pm last night, when James took Bailey out for a quick walk before bedtime near their Railway Street home.
Angela said: “Bailey was on his lead and the other dog just attacked him for no reason. It’s not right that you can’t even walk outside your own door.
“What if it is a child next time.”
She said the owners of the other dog, believed to be called Buster, also had another big, black dog with them. The couple made off from the scene.
Angela said: “My husband just picked Bailey up in his coat and came straight home, the blood was everywhere, as well as bits of flesh, I’ve never seen anything like it, it was horrific.
“I wrapped him in a towel and by the time we got to the emergency vets the towel and me were both soaked in blood.”
Bailey fought for his life through the night, but sadly died this morning because he was too weak to survive an operation to save him.
Devastated Angela, said: “We have had him since he was six-weeks-old. He was such a gorgeous little dog, he didn’t deserve this to happen to him. I am devastated.
“He was the most timid dog you could meet, he was frightened of everything. He wouldn’t say boo to a goose. He was like our little baby.”
She said she has had a huge amount of support from family and friends and people on social media who have been coming forward with information.
Angela said she wants the dog which attacked Bailey to be found to prevent something like this happening to anyone else.
A spokesman for Northumbria Police, said: “At around 10.16pm on Wednesday (May 23) police received a report that a dog had attacked another dog and its owner on Railway Street, Jarrow.
“Enquiries are still ongoing. We would encourage the owner of the offending dog to get in touch with police by calling 101 quoting reference 1342 230518.”