The SilkAir Boeing 737 went down in a swamp on the island of Sumatra midway through a flight from Jakarta to Singapore, where waiting families broke down in tears at the news.
A policeman on duty in Sungsang on the coast of the island said: "There was a bang when it crashed. I think there is little chance of survivors."
Indonesia's director-general of air transport, Zainuddin Sikado, also said it was unlikely there would be any survivors.
The 10-month-old aircraft, the newest in SilkAir's fleet, lost contact with air-traffic controllers and crashed 35 miles north of Palembang in Sumatra.
The airline said that it knew of no reports of distress calls from the aircraft and had no information on casualties.
Debris was strewn over the marshy area and parts of the Boeing were submerged. It was understood that the aircraft crashed in the Musi River which winds through a swamp on its way to the sea, and most of the wreckage sank quickly.
Rescue operations were being hampered by heavy rain, although the weather at the time of the crash was said to be fine. It is Indonesia's monsoon season. Rescuers were expected to be joined by a team from the United States-based Boeing Co, the makers of the air- craft, who will assist in the investigation.
A spokesman for the Civil Aviation Authority of Singapore (CAAS) said: "It's basically mountainous, a forest area."
There were 97 passengers, including a woman and two men from Britain, and seven crew. The crew were thought to be Singaporean apart from the pilot who was a New Zealander. Singapore authorities said the passengers were mainly Asian - there were 40 Singaporean nationals on board, 23 Indonesians and 10 Malaysians - with some Americans and Europeans.
At Singapore's Changi Airport, relatives and friends of passengers on the flight were summoned by announcement to the airline's offices. Some were already crying when they arrived.
In London, a Foreign Office spokesman said that they were in touch with the British embassy in Jakarta.
He confirmed that one British woman and two men were on board the flight, but there were no details.
"Our first duty will be to make sure the families are made aware of what has happened," he said.
SilkAir is a regional holiday arm of Singapore Airlines, flying mainly on routes in South-East Asia, and has had no previous crashes.
The Foreign Office in London later opened a telephone information line for friends and relatives concerned about people who may have been on the flight. The number to ring is 0171 839 1010.Reuse content