This is the terrifying moment passengers were engulfed in smoke when a fire broke out on a ferry in Indonesia.

The vessel, Angkal 6, was carrying 88 passengers and nine crew members when flames erupted while it was travelling in Klungkung, Bali, on Tuesday.

Authorities said the boat departed from Angkal Harbour in Kampung Kusamba village at around 4 pm local time. It was en route to Sampalan Harbour on Nusa Penida Island.

Around 15 minutes into the journey, a fire broke out on board, triggering panic among passengers as smoke spread through the vessel.

Head of Public Relations for Klungkung Police, Iptu I Dewa Nyoman Alit Purnawibawa, said: 'While at sea, the boat experienced a fire in the engine, prompting the crew to contact Angkal boat service staff in Nusa Penida.'

Rescue crews were immediately dispatched, with Angkal 7 deployed to evacuate all holidaymakers and crew safely.

The cause of the fire has not yet been determined and remains under investigation by ship technicians.

No injuries were reported following the incident.