The Red Falcon, which was carrying 56 people including 40 passengers from Southampton, had been trying to berth at the entrance of Cowes Harbour.
HM Coastguard launched a search of the area after witnesses reported hearing cries for help following the incident at around 8am on Sunday.
“We are currently carrying out an extensive search of the area with Cowes RNLI lifeboat, Calshot RNLI lifeboats and Coastguard Rescue Teams from Bembridge, Needles and Ventnor,” said a spokesperson.
“A coastguard search and rescue helicopter was searching the area but due to the low visibility in the area had to turn back. The search is ongoing and we have no further information at this stage.”
The Maritime and Coastguard Agency (MCA) later confirmed the cries for help came from a yachtsman who was trying to alert the master of the ferry.
Ferry company Red Funnel said the Red Falcon ship remained watertight and had been safely refloated to allow all passengers and vehicles to disembark.
Chief executive Fran Collins said: “At approximately 8 o’clock this morning in thick fog and on arrival into East Cowes from Southampton, Red Falcon made contact with a number of unmanned, moored yachts, and subsequently went aground with 40 passengers on board.
“There are no reports of anyone entering the water and there are no reported injuries to anybody involved in this incident.
“Red Falcon was re-floated at 10.55am and is now safely alongside in East Cowes. All passengers and vehicles have been safely discharged. The ship will now undergo a preliminary inspection before moving to Southampton for a detailed investigation.
“On behalf of Red Funnel, I would like to sincerely apologise to all those affected by this incident. Our staff are contacting passengers to offer them alternative sailings and service details are also available on our website.”
The MCA asked for witnesses to contact its investigations and enforcement unit.
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