A FAULTY hydraulic pipe was the most likely cause of a fire on a North Sea passenger ferry, it was revealed last night.

A major rescue operation was launched on Friday after Aberdeen coastguards received a distress signal sent by the Princess of Scandinavia, carrying nearly 900 people.

The ship had left North Shields at 3pm on Friday, bound for Norway and Sweden, before the blaze started between two engines and the ship's funnel.

Crew members eventually brought the fire under control and at 2am on Saturday one engine spluttered into action, and the vessel limped into the Norwegian port of Kristiansand, its first scheduled port of call, nearly eight hours late, on Saturday evening.

The 32,000-tonne vessel, owned and operated by Danish-based DFDS, made the emergency call at 9.47pm on Friday. On board were 246 British passengers, along with 428 from Sweden, 71 Norwegians and 13 from Denmark.

Fire broke out 150 miles off Aberdeen and the ship began drifting without power, in an area dotted with oil platforms.

Amongst many people trapped on the blazing ferry was John Philip, of Galashiels, Scotland.

He said: "We could not see any flames from our location on deck seven, but the smoke was visible."

"The crew told us that the ship had an engine fire, and asked us to find our way to the area for the lifeboats."

Although the official report is not expected before the end of next month, DFDS managing director Thor Johannessen said initial investigations support the theory that a leakage from a hydraulic pipe above the main engine caused the fire.

Authorities have granted permission for the ship to leave Kristiansand without passengers this morning. It will head for repairs at a Danish shipyard.

All sailings on the North Shields to Gothenburg via Kristiansand route are cancelled until at least after May 27, and passengers who have booked up to and including that date are being contacted.

More than a dozen boats and several rescue helicopters were scrambled after the vessel sent out a distress signal.

Two passengers collapsed on deck and were treated for shock, but did not need to be taken off the ship.

Passengers were escorted to the upper decks by cabin crew but were able to roam the upper two decks, hardly aware of the frantic efforts of the ship's firefighters to control the blaze below them.

After the ship returned to port, black scorch marks were clearly visible on the side of the funnel.

Passengers were quick to praise the crew.

Ian Donkin, 41, from Newcastle, said: "We were in the cinema when the film cut short and everyone was told to go up on deck.

"We found out it was a fire once we got on deck. We could see thick black smoke coming out of the funnel.

"People were just standing around and chatting. Everyone was very calm. It wasn't panicky at all."