An asylum-seeker boat carrying an estimated 150 people sank Wednesday en route to Australia's Christmas Island, barely a week after another vessel went down in the same area, killing up to 90.
The rickety ship capsized 107 nautical miles north of Christmas Island in the Indian Ocean and then sank, an Australian Maritime Safety Authority spokeswoman said, adding that people were in the water.
"We don't have numbers on survivors at this stage," she said.
The incident comes just days after another boat with around 200 people on board went down in the Indian Ocean as it made its way to Australia last Thursday.
Rescuers managed to save 110 people and 17 bodies were recovered, but no other survivors have been found.
"There are two merchant vessels on the scene, they are recovering survivors," the AMSA spokeswoman said of Wednesday's disaster, which happened in Indonesian waters.
The merchant ships were the MV Bison Express, a Philippines-flagged livestock carrier, and a tug boat.
AMSA said two Australian navy ships and a spotter aircraft capable of dropping liferaft, were heading to the scene with conditions described as 'fair, not ideal'.
In a statement, Australian Customs and Border Protection said police received a satellite phone call early Wednesday from the vessel.
"The Australian Maritime Safety Authority initiated an immediate response to the report and continues to coordinate the search and rescue effort," Customs said.
Details were passed to the Indonesian search and rescue authority Basarnas, which said it received a report that the generator was broken and the boat was taking on water.
A photo from the MV Bison and posted on the AMSA website showed a small, basic-looking boat crowded with people on its decks, apparently taken before it capsized and sunk.
The Australian Broadcasting Corporation said most of the passengers were believed to be Afghans and there were women and children on board, though this could not be immediately confirmed.
The accident is the latest in a series of refugee boat disasters in recent years, as unseaworthy, overloaded vessels packed with desperate migrants struggle to reach Australia.
Most boats originate in Indonesia, but there has been a recent spike in attempts from Sri Lanka.
Though they come in relatively small numbers by global standards, asylum-seekers are a sensitive political issue in Australia, dominating 2010 elections due to a record 6,555 arrivals.
Political parties remain deadlocked on how to deal with them.
Both sides of Australian politics support offshore processing of asylum-seekers but differ on where it should be conducted.
Canberra clinched a deal last year to send 800 boat people to Malaysia in exchange for 4,000 of that country's registered refugees in a bid to deter people-smugglers from the dangerous maritime voyage to Australia.
But Prime Minister Julia Gillard's fragile coalition government was unable to pass the required legislation through Parliament without the support of the opposition, amid concerns Malaysia was not a signatory to UN refugee conventions.
On Wednesday, about 40 MPs from across the political spectrum met in Canberra to call for a solution to the problem
Independent MP Andrew Wilkie urged parliament to act quickly.
"This parliament has to stop the problem. Both the government and opposition have to swallow their pride," he said.