The Queen's granddaughter Zara Tindall and her ex-England rugby player husband Mike Tindall have been spotted at a cafe in the tourist town of Wanaka.

The couple, who have a young daughter, are understood to be holidaying in the area.

They ate breakfast at Kai Whakapai yesterday, a staff member confirmed to the Herald.

The worker described the Tindalls as "smiley and friendly" and said they appeared to be enjoying their meals.

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Although other customers told staff they recognised the famous family no one approached them.

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Mike Tindall on Wednesday tweeted a photo of a speedboat on a picturesque lake, that appeared to be Lake Wanaka.

As well as being 16th in line to the throne Zara Tindall, formerly Zara Phillips, won a silver medal in equestrian at the London Olympics in 2012.

She is a patron of the New Zealand charity the CatWalk Trust which raises money for spinal chord injury research. The organisation was founded in 2005 by Kiwi equestrian rider Catriona Williams who became a tetraplegic after an accident in 2002.

Mike Tindall played England's national rugby team between 2000 and 2011.

He wed Zara, who is the daughter of Anne, Princess Royal, and her first husband, Captain Mark Phillips, at Canongate Kirk in Edinburgh on July 30, 2011.

While in New Zealand for the 2011 Rugby World Cup just months after their marriage, he was suspended from the team's elite player squad for throwing a dwarf on a night out in Queenstown.

Mike Tindall at Trusts Stadium in Auckland for the team's training session ahead of England's match gainst Scotland at Eden Park in the Rugby World Cup 2011. Photo / File
Mike Tindall at Trusts Stadium in Auckland for the team's training session ahead of England's match gainst Scotland at Eden Park in the Rugby World Cup 2011. Photo / File

He was fined £25,000 by the Rugby Football Union for the incident but had the penalty reduced to £15,000 on appeal.

Footage of Mike flirting with a mystery blonde woman at a bar in Queenstown also surfaced online while he was in the resort town during the competition.

A security guard was charged with accessing a computer system for a dishonest purpose for posting the video, which was captured on CCTV, to YouTube.