Updated February 01, 2018 18:29:15

Photo: The ferry, which sunk off the coast of Kiribati, was carrying 88 people. (ABC News: Supplied)

Twenty-three school students are among those missing after a ferry sank in waters off the Pacific island nation of Kiribati.

The 18-metre wooden catamaran MV Butiraoi broke up and capsized not long after it set out from the island of Nonouti two weeks ago.

Radio Kiribati reports that a survey of villages on Nonouti has determined there were 88 passengers on board.

Thirteen were high school students and 10 were primary school students who were heading to the capital Tarawa for the start of the school term.

Former president and now MP for Nonouti, Sir Ieremia Tabai, said every village on the island has been devastated by the tragedy.

Photo: A fishing vessel was diverted to the location and picked up survivors on Sunday afternoon. (Supplied: NZ Air Force)

"Every village has got somebody that was on that boat," he said.

"For the families and those who know the students, it's a harsh experience that they are going through now."

Sir Ieremia said many people are asking why it took eight days to raise the alarm after the ferry failed to make its scheduled arrival in Tarawa.

He has called for the Government to establish an independent commission of inquiry to determine what went wrong.

"We will never believe what comes out of the Government," he said.

Seven survivors were rescued by a fishing boat on Sunday after a New Zealand Air Force plane spotted them drifting in a dinghy.

Two Australian planes are involved in the ongoing air and sea search to find the missing passengers and crew.

Photo: A New Zealand Air Force P-3K2 Orion airplane was sent to search for the missing ferry. (Supplied: New Zealand Air Force)

Topics: disasters-and-accidents, maritime, accidents, kiribati, pacific

First posted February 01, 2018 18:28:10