This paper presents a study on failure investigation of top-hat composite stiffened panels using a combination of techniques. Acoustic emission technique is used to discriminate between the various failure modes using piezoelectric sensors. In addition, an attempt is made to investigate the possibility of using a state of the art surfaced bonded fibre-optic sensor as an acoustic sensor. A strain insensitive fibre Bragg grating (FBG) sensor is used to compare the performance of piezoelectric sensors for composite structures. On the other hand, fibre-optic sensors have some beneficial properties such as low specific weight, small size and good compatibility with polymeric composites compared to traditional sensing mechanisms. FBG sensors are expected to provide a replacement for traditional electric sensors as FBGs are not susceptible to electromagnetic signature, have multi-functionality and enable multiplexing. Fibre-optic sensors are embedded in the composite specimen to measure the non-linear strain at the bend and to analyse the progressive failure with strain anomalies.