People can be seen on the bow of a ship that is on fire about 1km off the coast of Whakatane.

Emergency services are on their way off the coast of Whakatane after reports a passenger ship is on fire.

Read more: Whakatane ship fire: All passengers, crew rescued

Rotorua Daily Post reporter Katee Shanks is at the Whakatane Heads where a crowd of about 60 people has gathered.

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She said the flames were overtaking the boat.

"You can see people on the bow.

"This is awful, the flames are huge and are taking over the ship."

She said there was complete shock among those who had gathered at the Heads.

St John Ambulance had just arrived and charter boats and Coastguard were being sent out.

Police Northern Communications Centre spokesman Inspector Peter Raynes said the call came in at 3.45pm that help was needed after the passenger ship got into difficulty.

He could not confirm what the trouble was but said the police's search and rescue team, Coast Guard and the Rescue Co-ordination Centre were all involved to help the passengers and crew.

She said the ship was about 1km off the shore.