Nearly 23 people were feared dead after a boat carrying about 40 suspected asylum seekers sank on Sunday, hundreds of nautical miles off the Cocos Islands, west of Australia.

Passing merchant ship LNG Pioneer and Taiwanese fishing craft came to the rescue following a plea by Australian authorities after the boat got into trouble late last night.

Since then Australian Maritime Safety Authority (AMSA) has been marshalling resources at sea and in the air to find the survivors, ABC reported.

At least 17 people have been rescued, but the rest are still missing, it said.

It is feared there were at least 40 suspected asylum seekers on board and they were trying to reach Australian waters, the media report said.

AMSA spokeswoman Rhianne Robson said the crew was still searching for survivors, but they held grave concerns.

"The LNG Pioneer is a large vessel and they are trying their best with life rafts and their life boat to recover those in the water," the spokeswoman said.

Australian Home Affairs Minister Brendan O'Connor said, "We'll ensure that we do everything we can, firstly to rescue any remaining passengers that are at sea and provide whatever other support is required to assist the commercial vessels."

He said: "That's our focus at the moment but of course we'll look to the other issues about where the passengers should head as soon as we've done everything we can to save people that may be in the sea at this point."

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