Costa Cruises said the fire on the 29,000-tonne Costa Allegra had been put out and none of the passengers or crew were hurt.

The giant Costa Concordia capsized on January 13 after hitting rocks off the island of Giglio. Divers and rescue workers are still searching for the bodies of seven people who remain missing.

The much smaller Costa Allegra, with 636 passengers and 413 crew on board, was sailing some 200 miles southwest of the Seychelles when the fire broke out and it sent a distress signal, the company said.

The Italian coastguard said in a statement it had alerted authorities on the Seychelles, which was sending rescue vessels. An aircraft had spotted the ship's position.

Lieutenant Massimo Maccheroni of the coastguard told Reuters two fishing boats had been diverted towards the liner and the first was expected to arrive around 2300 GMT.

Two Seychelles tugs were also on the way and would arrive tomorrow afternoon.

Maccheroni said the ship had no engine power but was able to steer.

Seas in the area were moderate with winds gusting at 25 knots, the coastguard said in their statement.

Shares of Carnival Cruises (CCL.L) (CCL.N) fell slightly in London trading after news of Costa Allegra's difficulties and were down 2 percent at 1600 GMT.

A spokesman for Costa said the passengers included 130 each from Italy and France, 100 from Austria and 90 from Switzerland.

"It's a fairly positive picture that we are nevertheless continuing to monitor, until the hopefully positive and swift outcome," Italian coastguard spokesman Cosimo Nicastro said.

A Seychelles coastguard official confirmed that support vessels were "on their way" but said they would give no further information until authorised by Costa Cruises.

The company said the passengers were "all in good health and, having been promptly informed of the situation, were assembled at the muster points as a precaution."

Costa Cruises was accused by some passengers of long delays and a lack of organisation in the evacuation of the Costa Concordia.

That vessel's Italian captain is under house arrest near Naples accused of multiple manslaughter and abandoning the ship before the 4,200 passengers and crew were evacuated.

The Costa Allegra left Diego Suarez in Madagascar on Saturday and had been due to dock in the Seychelles capital of Victoria on Tuesday.

(Additional reporting by Steve Scherer and Roberto Landucci in Rome and George Thande in the Seychelles; Editing by Barry Moody and Roger Atwood)

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