A ferry carrying more than 500 passengers from Zanzibar to Pemba island off the east African country of Tanzania has capsized and scores of people are missing, police said on Saturday.

Zanzibar, also know as Unguja, and Pemba are the two main islands of the Zanzibar archipelago, a popular destination for tourists visiting their pristine white Indian Ocean beaches.

'The ship's manifest shows that the vessel travelling from Unguja to Pemba islands had more than 500 passengers on board,' Zanzibar Police Commissioner Mussa Alli Mussa told Reuters.

'Some 260 passengers have so far been rescued ... we have recovered several bodies but I can't give you the exact death toll at the moment because the situation is very volatile,' he said.

Pemba is about 40 km from Zanzibar. Passengers who regularly take ferries between the two islands said the vessels are in a poor state of repair and are often overcrowded and loaded with cargo.

'They normally pack us in like sardines in a can. And for that I really fear this could be a very big disaster,' said resident Mwnakhamis Juma.

The government in Zanzibar said last month it planned to invest in bigger, more reliable vessels to ferry passengers between the two islands.

'We are fearing the greatest calamity in the history of Zanzibar. This is a disaster,' said a government official, who declined to be named.

Two small overloaded boats capsized and were swept away in high seas off Tanzania's coast in January this year and in May 2009, a vessel just off Zanzibar sank with dozens aboard, killing six.

Mussa said rescue workers with the aid of some fishing boats in the area were helping to rescue more passengers and recover bodies to bring them to Zanzibar's main town for post-mortems and identification.

'Because of strong ocean winds, some of the bodies could even be washed up in Tanga (mainland Tanzania),' he said. 'The cause of the accident cannot be confirmed at the moment.'

A parent in Mkoani on Pemba island was already mourning his three children, who were aboard the vessel capsized MV Spice.

'I had two sons and a daughter coming back to Pemba from a school holiday break ... and I am fearing for the worse,' said Juma Bakar.-Reuters