There were 249 people aboard who were rescued by six ships that moved in to help after the explosion on the Lisco Gloria around midnight. Three were taken to hospitals by helicopter and another 26 were slightly injured, police said.
German officials and the ferry said the blast appeared to have been a technical mishap.
A firefighting vessel tries to extinguish a fire on the car ferry Lisco Gloria in the Baltic Sea, on Saturday, Oct. 9, 2010. The maritime emergencies center in Cuxhaven said that an explosion apparently occurred on the Lisco Gloria at about midnight. The Lithuanian-flagged ferry had more than 200 people on board and was traveling from the German port of Kiel to Klaipeda, Lithuania. German authorities said that all passengers and crew members have been rescued.
"The investigation is ongoing, but all indications so far suggest that the cause was a technical problem," Schleswig-Holstein state police spokesman Stefan Jung told The Associated Press.
TV footage showed a fire on the top deck, while the decks below appeared to be gutted by the fire.
"People were lucky because it all happened on a major shipping route, that's why the other vessels were quickly on hand to rescue people," said Ulrike Windhoevel, the spokeswoman for Germany's Central Command for Maritime Emergencies in Cuxhaven.
Authorities allowed the blaze aboard the ship to burn because "there's a possibility it could capsize if we continue," a Danish navy duty commander told the AP. No oil had spilled, he said.
"At the moment there are four ships at the scene, with more on their way. Their primary purpose is an environmental protection service. If there is an oil spill we can cordon off the scene," said the duty commander, who declined to be named in line with Danish military policy.
Windhoevel said firefighters were still spraying water on the ship's exterior to cool it down.
"But the firefighters cannot put out the blaze on the ship, because at some point it would sink because of all the water in it," she said.
The Lithuanian-flagged ferry was traveling from the German port of Kiel to Klaipeda, Lithuania, authorities said.
Passengers and crew were evacuated by lifeboat and taken by another ferry to a naval base near Kiel, officials and the shipping company DFDS said. The passengers were mostly Lithuanians, DFDS spokesman Gert Jakobsen said.
Most of the passengers were taken to hotels for the night, but some drove themselves home, Windhoevel said.
Authorities said a four-person team was lowered to the ferry by helicopter and managed to anchor the vessel off the southern tip of the Danish island Langeland to keep it from drifting farther ashore.
A firefighting vessel, bottom, tries to extinguish a fire on the car ferry Lisco Gloria in the Baltic Sea, on Saturday, Oct. 9, 2010. The maritime emergencies center in Cuxhaven said that an explosion apparently occurred on the Lisco Gloria at about midnight. The Lithuanian-flagged ferry had more than 200 people on board and was traveling from the German port of Kiel to Klaipeda, Lithuania. German authorities said that all passengers and crew members have been rescued
A firefighting vessel, top right, tries to extinguish a fire on the car ferry Lisco Gloria in the Baltic Sea, on Saturday, Oct. 9, 2010. The maritime emergencies center in Cuxhaven said that an explosion apparently occurred on the Lisco Gloria at about midnight. The Lithuanian-flagged ferry had more than 200 people on board and was traveling from the German port of Kiel to Klaipeda, Lithuania. German authorities said that all passengers and crew members have been rescued
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