VH-TGT was conducting solo circuit training using right hand circuits for runway 21R, and at the same time VH-XYI was conducting dual circuit training using left hand circuits for runway 21L. On downwind VH-XYI was cleared by the air traffic controller responsible for runway 21L operations to land ahead of another aircraft inbound from the north east. To increase separation the instructor decided to make a close in, steep gliding approach. VH-TGT was cleared for a touch and go landing on runway 21R by the air traffic controller responsible for runway 21R operations, then both controllers became involved in monitoring other aircraft in their respective areas of responsibility. An observer in the control tower noticed VH-TGT was on short final approach for runway 21L with VH-XYI, also on final approach, and descending rapidly towards VH-TGT. VH-XYI was instructed to go around, the pilot taking further avoiding action by banking to the left. The student pilot in command of VH-TGT had less than 2 hours solo experience.