Authorities say more than half of the 350 people who were aboard the MV Rabaul Queen have been rescued, over 12 hours after it sank to the northeast of the PNG mainland.
PNG's National Maritime Safety Authority (NMSA) says between 198 and 219 people have been brought aboard the six international merchant ships that were directed by Australian authorities to aid survivors of the ferry, which sank early on Thursday morning.
'The number I have is 198 to 219 have been rescued,' a spokesperson said.
'These are people rescued. We are awaiting official confirmation.'
NMSA rescue co-ordinator Captain Nurur Rahman said there had been no reports of bodies being found.
The Australian Maritime Safety Authority is reporting 219 people have been rescued and taken aboard some of the six merchant vessels that were directed to the disaster site by maritime authorities.
At least one NMSA agent is on board one of the ships to help co-ordinate the rescue.
PNG awoke on Thursday to news that as many as 350 people might have perished when the ship went down as it travelled from Kimbe in New Britain to Lae, PNG's second largest city, about 6am (AEST).
PNG Prime Minister Peter O'Neill said he had received a phone call from Australian High Commissioner Ian Kemish, who pledged Australia's support.
Australia sent several aircraft to the area where the ferry went down.
'Our sympathies go out to the families,' Mr O'Neill said.
'We need to bring some safety measures back into this industry.'
However, he shied away from announcing a full investigation into the tragedy.
'We will be guided by reports that we get.'
The ship went down in what's understood to be extremely bad weather.
Australian Foreign Minister Kevin Rudd said Australia stood 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,' Mr Rudd said in a statement.
The Australian Maritime Safety Authority (AMSA) arranged for ships in the area to conduct rescues and for aircraft to fly over the area.
The aircraft will assist with dropping rescue equipment, including life rafts.
The Australian High Commission in Port Moresby is still seeking to confirm whether any Australians were on the vessel.
The Department of Foreign Affairs and Trade said the shipping company had advised them there were unlikely to be any foreigners on board.
The Australian High Commission in Port Moresby is seeking to confirm whether any Australians were on board the vessel.
The Department of Foreign Affairs and Trade said the shipping company had advised them there were unlikely to be any foreigners on board.
Prime Minister Julia Gillard earlier said there was likely to be a very high loss of life from the tragedy.
'This is obviously a major tragedy,' she said.
'We have been asked to provide assistance to PNG and we are providing assistance to PNG.'
The opposition said it supported the government's decision to help in the search for survivors.
'It is vital that every effort is made to locate and rescue any of the people in the water,' foreign affairs spokeswoman Julia Bishop said.
'The coalition extends its sympathies to the families of those on board the MV Rabaul Queen and extends its support to the efforts of PNG and Australian rescuers.'
