Two people have been rescued after a boat caught fire off Pepin Island, near Nelson.
An alert went out at 12.45pm and the Nelson Marlborough Rescue Helicopter did an aerial search, while the fishing boat Aukaha went to assist, Constable Shane Ohlson said.
The helicopter arrived at the scene to find the vessel well ablaze.
Two people who had escaped the fire in a small inflatable dinghy were located nearby. They were unhurt and were brought in to Nelson by the coastguard.
Coastguard Vice President and duty officer Peter Kara said shortly after 2pm that the coastguard was still putting out the fire.
A fire officer has been sent out to Cable Bay to assess the scene from shore but the fire nevertheless contained.
"Obviously if [the boat] is safe enough to tow, we'll tow it back, but we'd rather wait and make that assessment."
The nature of the vessel was not known, but it was estimated to measure between 40 to 45ft.
The pair were unharmed but traumatised by the fire, he said.