Jakarta, Sep 15 (IANS): Rescuers have recovered 10 bodies and rescued 126 people after a passenger ferry caught fire and sank in waters off Indonesia's Central Sulawesi province, a government official said on Saturday.

KM Fungka Permata, which departed from Baubau town of Sulawesi province and was heading to Bangai port in Sulawesi province, sank in the waters off Sagu Island in central Indonesia on Friday, Transport Ministry spokesman Bambang Ervan was cited as saying by Xinhua news agency.

"The ship caught fire and finally went down in waters off Sagu Island," he said. All the survivors of the ship were ferried to Bangai port in Saturday morning.

The search and rescue operation for missing people was underway, said R. Agus H. Purnomo, Director General for sea transport of the Transport Ministry. "Combing of areas where the incident took place was being carried out," he said.

Ship ferrying is a favourite transport means in Indonesia, a vast archipelago country home to over 17,500 islands.