Confusion; Situational Awareness; Communication Breakdown
ATC Issue All Types; Conflict Ground Conflict; Critical; Deviation / Discrepancy - Procedural Other / Unknown
Air Traffic Control Issued Advisory / Alert; Flight Crew Took Evasive Action
Human Factors; Procedure
We were cleared to taxi to and hold short of Runway 27. We complied with those instructions and were holding short when the Tower asked if we were ready to go; where upon I told them that we would need a minute or so more so we can finish our cockpit duties. After we got done I told them we were ready. At that point the Tower cleared me for takeoff on Runway 27 with a 360 degree heading after departure and we read back the take off clearance. We then cleared ourselves visually and began to slowly move forward and before I could apply power and say 'props forward; runway checks' I suddenly I heard a voice which was not Tower's come over the radio saying 'no; no; no; no; no; Tower; short final!' I hit the brakes and stopped just as the nose touched the hold short line and might have crossed it. As our plane stopped I heard Tower come on the radio and say 'hold short; hold short' and before I could reply or say that our nose might be over the hold short line a plane passed before me; with his left wing down clearly coming out of a turn; straighten out and landed on Runway 27. After the seaplane cleared the runway; Tower apologized followed by silence. After a few moments I then asked the Tower if I was cleared for 'line up and wait' and after a few more moments of silence Tower cleared me for takeoff with the same instructions as before. I read back the instructions; visually cleared ourselves again and proceeded to take off with no further incident.
A pilot cleared into position on EYW Runway 27 was warned by an aircraft on short final to remain clear of the runway as it passed overhead for landing. ATC then recleared the aircraft onto the runway.