An "underwater Amazon" was severely damaged when the 90-metre ship ran aground during low tide.

One of Indonesia's best coral reefs has been severely damaged by a cruise liner smashing into it at low tide.

The Caledonian Sky ship ran aground on March 4 at Raja Ampat, an Indonesian island chain that has described as an underwater Amazon.

The British-owned cruise company said the incident was "unfortunate" and said it is "firmly committed to protection of the environment".

A tugboat was deployed to help refloat the 90-metre ship, something that "shouldn't have happened," a Pacific marine researcher at the University of Papua said.

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123RF Raja Ampat is a popular diving spot.

It damaged the reef even worse," Ricardo Tapilatu told the Mongabay environmental news site. "They should've waited for high tide."

"How can this happen? Was a 12 year old at the wheel?" a horrified owner of a local homestay wrote on Facebook.

More than 100 passengers and 79 crew members had to be evacuated because of the incident which happened when the ship was caught in low tide, despite being equipped with GPS and radar instruments, an official evaluation found.

It is estimated that the 4290-tonne Caledonian Sky damaged 1600 square metres of coral at the popular diving site.

The Research Center for Pacific Marine Resources recommended the company pay compensation of US$800-$1200 per square meter, for a total of $1.28 million-$1.92 million