Twelve tourists were rescued from the vessel in Marsa Alam, which local officials said was carrying 15 British passengers, 10 crew members and two guides.

Authorities said initial reports suggested the fire was due to an electrical fault.

The boat had left Port Ghalib on Tuesday and was due to return on Sunday.

The Red Sea Governorate said: "The initial examination resulted in an electrical short circuit in the engine room, and the investigation authorities went to conduct an inspection and investigation."

Footage on social media appeared to show the boat almost entirely engulfed in flames and smoke.

"We saw smoke from the boat, it was around 9km from the beach," said Ahmed Maher, a diving manager at Marsa Shagra village, according to Reuters.

A Foreign Office spokesperson said: "We are in contact with local authorities following an incident aboard a dive boat near Marsa Alam, and are supporting British nationals involved."

The fire was spotted at 9.15am on Sunday, and in a statement from the Red Sea Governorate, its secretary general Major General Mohamed Bandari confirmed the accident was the result of a fire on the boat, which was named the Hurricane.

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The statement added: "He [Mr Bandari] pointed out that the crew and passengers were rescued by the boat named Blue and returned to central Marsa Alam, and a search is still under way for three British passengers by the concerned authorities and other boats, stressing that the Ambulance Authority and the Directorate of Health Affairs have been notified to raise the level of readiness and follow-up is under way."

The Tornado Marine Fleet, which owns the Hurricane vessel, said the boat caught fire at 6.30am "while doing the diving briefing".

It said it was now bringing the boat back to the marina under authority supervision.