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A ferry with around 350 people on board is believed to have sunk off Papua New Guinea's north coast with a high loss of life, the Australian prime minister and media said on Thursday.

 

"This is obviously a major tragedy - 350 people on board a ship that has gone down," Australian Prime Minister Julia Gillard told reporters in Melbourne.

 

"It is likely a very high loss of life here."

 

The Australian Broadcasting Corporation (ABC) said search-and-rescue planes were on their way to the area to look for survivors from the boat, which was travelling between the island of New Britain and the town of Lae on PNG's remote north coast.

 

Australia was helping Papua New Guinea respond to the unfolding disaster, Gillard said.

 

Disaster authorities were unavailable to comment immediately.

 

The operator of the ferry, Star Ships, said it had lost contact with the MV Rabaul Queen earlier on Thursday, according to the ABC.

 

Papua New Guinea, Australia's nearest neighbor, is largely undeveloped, with poor infrastructure and limited facilities despite enormous resources wealth.

 

The majority of Papua New Guinea's seven million people eke out subsistence lifestyles in villages clinging to jungle-clad mountainsides or scattered around its many islands. — Reuters