Melbourne: Several people are feared dead after a ferry carrying as many as 350 passengers on board sank off the north coast of Papua New Guinea, Australian Prime Minister Julia Gillard said on Thursday.
"There has been a boat go down in Papua New Guinea with, as we understand it, 350 people on board," Gillard said.
"This is obviously a major tragedy... There is likely to be a very high death toll," she was quoted as saying by the Australian news agency AAP.
A distress signal was sent from the MV Rabaul Queen on Thursday morning, PNG's National Maritime Safety Authority said.
Rescue workers have rescued 28 people from the water so far, according to a maritime official, who said hundreds of passengers were still unaccounted for.
"They have rescued 28 people who are now on board one vessel," Rescue co-ordinator Captain Nurur Rahman said.
Captain Rahman said four merchant ships were diverted to the scene by Australian authorities to help with the rescue.
"I cannot confirm or deny the 350 missing number, it is hearsay. I have not seen the manifest as yet, but it is likely around 300."
A distress signal was sent from the MV Rabaul Queen on Thursday morning when travelling between Lae and the West New Britain town of Kimbe in the east of the Pacific nation on Thursday, PNG's National Maritime Safety Authority said.
"We have been asked to provide assistance to PNG and we are providing assistance to PNG... Australian diplomatic staff are monitoring the situation but there have so far been no reports of Australians on board," Gillard said.
"But 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 as they respond to this tragedy," she said.
Capt Rahman said he was being fed information from a NMSA agent on board one of the ships.
"The dynamics of this thing are changing all the time, minute by minute," he said.
A NMSA spokesperson said two helicopters from Lae had also joined the rescue operation.
Ferry operator Rabaul Shipping was quoted by ABC news as saying that it lost contact with the vessel early this morning.
Australia's Department of Foreign Affairs said the ferry's owners do not believe foreigners were onboard, however, consular officials are still seeking confirmation.