More than 200 people were plucked from waters off Papua New Guinea on Thursday after a ferry sank but many others remained missing, with rescuers scouring the area for further survivors.
Operator Star Ships said it lost contact with the MV Rabaul Queen at about 6am on Thursday (2000 GMT Wednesday) while it was travelling between Kimbe and Lae in the east of the Pacific nation, blaming "bad weather" for the disaster.
The PNG National Maritime Safety Authority (NMSA) said it was first alerted by a distress signal early Thursday and confirmed that "the vessel has sunk and passengers are in the waters awaiting rescue".
Rescue co-ordinator Captain Nurur Rahman said more than 300 people were on board the vessel but it was too early to say why the ferry went down, refusing to speculate on whether the ship was overloaded.
"Our priority at the moment is to save lives, but it is an unusual occurrence," he told AFP.
"We've had a few cargo ship mishaps before, but never a ferry."
He said weather conditions were manageable, helping the rescue operation.
"There are strong winds, but that's normal. The ship has completely sunk -- you can't see anything," he added.
Australia's Maritime Safety Authority said the Rabaul Queen went down about nine nautical miles (16 kilometres) off the coast and it was helping coordinate the rescue, with 219 people saved so far.
"As at 4:30pm (0530 GMT), there are eight merchant vessels on scene, five of which have recovered survivors," it said.
"There are reported to be 219 survivors on these five vessels."
An Australian search and rescue aircraft with life raft-dropping capabilities was also assisting, as well as three local helicopters, AMSA added.
"Further fixed-wing aviation search assets have also been tasked by AMSA, including an Australian Defence Force PC3 Orion aircraft and AMSA's Darwin-based Dornier," the maritime agency said.
Australian Prime Minister Julia Gillard earlier described it as a "major tragedy" that had likely claimed a large number of lives.
"Given the likely very high loss of life here, I think when this news comes to the attention of Australians around the country they will be thinking about the people of PNG," Gillard said in the hours immediately after the sinking.
Foreign Minister Kevin Rudd said Canberra was ready to help in any way it could.
"I spoke to my counterpart, PNG Foreign Minister Ano Pala, earlier today to inform him that Australia stands ready to offer all necessary assistance," he said.
Local reports said many of those on board the Rabaul Queen were students and trainee teachers, while Australia's foreign office said it had been advised by Star Ships that "they do not believe that there were any foreigners on board".
Martin Mosi, director of the PNG National Disaster Centre, said he was awaiting word on casualties and it was "very difficult to say" what the cause may have been.
"Is it weather, is it overloading or is it something to do with the vessel itself? We do not know but that will certainly come to light very soon," he added.
Star Ships, among PNG's largest passenger ship operators, runs regular services to the nation's outlying islands including to New Britain's Kimbe, a popular dive site that attracts tourists from across the world.