The flight instructor hand-propped the engine and the student pilot set the engine controls before the flight. The flight consisted mainly of practicing ground reference maneuvers and slips. The flight instructor reported that they were about 700 feet above the ground when the engine lost all power and the propeller stopped spinning. The flight instructor performed the emergency checklist by memory and located a frozen lake on which to land. The airplane nosed over during the landing roll, which resulted in substantial damage to the wing spars. Photos taken at the accident site showed that the fuel primer control was unlocked and the primer control was at an intermediate position. The flight instructor reported that the student stated he locked the primer control, but only turned the control about 1/8 inch to lock it. The flight instructor stated that the primer control was in its locked position when he checked it before the flight. It could not be determined how the primer control became unlocked. The engine was started and ran normally during the postaccident examination. When the primer control was placed in the position found after the accident and the power was reduced to 1,000 rpm, the engine lost all power. The airplane was not equipped with an electrical system and therefore could not be restarted in flight.