Dozens of people are feared to have drowned and a frantic rescue operation was underway last night after a boat carrying up to 200 asylum seekers capsized on its way from Indonesia to Australia.

Two Australian navy ships and two merchant ships arrived last night on the scene - about 110 nautical miles north of Christmas Island - after an Australian surveillance aircraft spotted the stricken boat about 3pm.

West Australian Police Commissioner Karl O'Callaghan said an early estimate was that 75 people could have drowned.

He confirmed that bodies were seen. ''Of course we can't confirm that they have died but it's likely,'' he said.

Late last night the Australian Maritime Safety Authority reported that 110 people had been rescued.