Passengers on a stricken Italian liner were due to arrive on Thursday in the Seychelles capital after using mineral water to wash and fight sweltering heat as the ship was slowly towed to port, two days after a fire disabled it.

Seychelles authorities prepared hundreds of hotel rooms on the idyllic Indian Ocean island and secured seats on aircraft to fly the Costa Allegra's 1,000 passengers and crew back home.

Italian investigators also awaited the arrival in the capital Victoria of the liner, which belongs to the same fleet as the doomed Costa Concordia that smashed into rocks off Tuscany last month.

Towed by a French tuna fishing boat and accompanied by coast guard vessels in the pirate-infested Indian Ocean, the Costa Allegra was carrying passengers spending a third night on the vessel since an engine fire knocked out power on Monday.

With no electricity and no air conditioning, the passengers were crowded on decks in baking temperatures, with the liner's operating company Costa Crociere saying it was offering mineral water "for personal hygiene needs."

"The bathrooms on the ship have not been working since the fire," Italian coast guard spokesperson Cosimo Nicastro said. Emergency supplies, food and electric torches have been airlifted by helicopter onto the vessel.

The liner was expected to arrive into port in Mahe, the main island of the Seychelles archipelago, on Thursday morning depending on weather conditions, Costa Crociere added in a statement on Wednesday.

"The minute the boat docks the passengers will disembark because all formalities have already been taken care of, immigration was airlifted onto the boat this morning," said Seychelles tourism board director Alain St. Ange.

"They'll arrive early and probably want a cooked breakfast. They've had two or three days of bubbling away on an ocean on a boat with no steam. It's not been easy but I know they are already relieved to be heading into port."

Two airplanes are already in Victoria, waiting to fly passengers home, said Lina Laurence, spokesperson for the Seychelles Civil Aviation Authority, with a third expected to arrive on Thursday.

However, over half the passengers have opted to enjoy their holiday in the Seychelles in "high quality hotels" at Costa Crociere expense, the company said in a statement.

"Up to now, 376 guests out of 627 agreed on the Costa Cruises' proposal to continue their vacation in Seychelles," the statement read, adding that the remaining 251 passengers would fly home Thursday evening.

A French tuna fishing boat, the Trevignon, responded to the Costa Allegra's mayday call and was towing the boat solo, crawling along at a speed of around six knots (11 kilometres or seven miles an hour) through calm seas.

Conditions onboard the liner are tough, the French captain of the Trevignon Alain Derveute told the Italian news channel TGCOM24.

"On board the Allegra, the conditions are difficult, there is no electricity and the heat is suffocating. It's 30 degrees outside but it must be even worse inside," Derveute said.

"We know there are pirates in these waters but the passengers are safe because the Allegra has military personnel on board. This is exceptional, nothing like this has ever happened to me."

The fire broke out near the ship's generators in the engine room as the Costa Allegra was making its way from Madagascar, which it departed on Saturday, to the Seychelles, where it had been due to arrive on Tuesday.

Emergency crews on board extinguished the fire after a few hours and no-one was injured, but the liner was left powerless and adrift.

The Costa Allegra is owned by the same company as the much larger Costa Concordia, which ran aground off the Italian island of Giglio and keeled over last month with 4,229 people on board in an accident that claimed 32 lives.

Nine people are under investigation for the disaster, including three Costa Crociere executives, the ship's captain and five other crew members.

Costa Crociere said there were 636 passengers and 413 crew from 25 countries on board the Allegra, including nine Italian Marines hired to guard against possible pirate attacks. It said everyone was in good health.

Most of the passengers are Italian, French, Austrian and Swiss.

After the Seychelles, an archipelago of more than 115 islands, the Costa Allegra had been due to travel along the Red Sea to the Mediterranean.