Wellington, Jan 7 (IANS): A hot air balloon caught fire and crashed in New Zealand Saturday morning, killing all 11 people on board, a media report said.

The balloon came down in flames near the small town of Clareville, north of Wellington on the North Island, about 7.30 a.m., the Australian Associated Press (AAP) reported.

TVNZ said there were 10 passengers and a pilot on board the balloon.

A cyclist who witnessed the crash told Radio New Zealand that he saw flames licking up the side of the basket below the balloon. He said he saw 10 metres of flames trailing from the descending balloon.

"It came down like a bloody rocket and then there was a big bang," the New Zealand Herald website quoted a local resident named David McKinlay as saying.

The area is a popular hot air ballooning destination.

A ballooning website said the hot air balloon took off after sunrise and lasted for an hour.

The crash site was cordoned off and only emergency workers and the families of those in the balloon were being allowed through, said Radio New Zealand.