Eight people whale watching off the Gold Coast have been rescued after their catamaran caught fire and sank off Main Beach this morning.

Key points: An electrical fault is believed to have started a fire on the 18-metre boat 8 kilometres off the Gold Coast

An electrical fault is believed to have started a fire on the 18-metre boat 8 kilometres off the Gold Coast By the time emergency services arrived, it was fully engulfed by flames

By the time emergency services arrived, it was fully engulfed by flames Two locals and their friends from Germany and Austria were on board but escaped uninjured

Two locals, aged in their 70s, had taken German and Austrian friends out for the day when they ran into trouble about 9:00am.

Police said early investigations indicated there was an electrical fault in the engine room of the 18-metre vessel, which quickly escalated.

"The skipper has heard a bang and gone down in the engine room to inspect the cause," Senior Sergeant Jay Notaro said.

Those on board escaped without any major injuries. ( Supplied: Queensland Ambulance )

"He opened up the switchboard and at that time, it immediately combusted and fire has broken out.

"He has got everyone together, onto the tender, and from there has made a distress call and emergency services responded."

Beverley Weldon from the Gold Coast Seaway Tower said nearby boats were the first to call for help, just after 9:00am.

The catamaran, called Renee, was fully engulfed by flames, about 8 kilometres off Main Beach, when emergency services arrived.

The boat passengers were assessed at Main Beach and were said to be shaken from the incident ( ABC News )

A thick black plume of smoke could be seen from the shore.

Stuart Cutajar, from the Queensland Ambulance Service, said the group, aged between 13 and 78, was examined once onshore at the Water Police Station at Main Beach.

He said they were shaken but not injured.

"They have gone out to enjoy some time together and encountered this situation, so I would say they would have been fairly shaken from it," he said.

"The vessel was well involved so it would have been a confronting scene for sure.

Smoke from the fire could be seen from the shore. ( Supplied: Queensland Ambulance Service )

"It could have been a lot different.

"My understanding is no-one spent any time in the water and [there were] no burns."

Senior Sergeant Notaro said fortunately it was a good news story.

"The people are all well, no injuries at all, in quite good spirits actually," he said.

Police do not believe the fire was suspicious and said the boat was insured.

Senior Sergeant Notaro did not believe the boat would be salvageable, and therefore authorities were unlikely to determine the cause of the fire.