Dozens of people are feared to have died after a wooden boat carrying 97 illegal immigrants capsized off the coast in Malaysia.

Up to 55 people, including two children and 12 women, have been rescued by local fishermen and emergency officials after the vessel sank off the Malaysian coast.

However 35 of the passengers are still missing and two bodies have so far been recovered, according to local reports.

Unverified sources said a leak in the boat, which made it unfit for sea voyage, caused the tragedy, which took place around midnight local time.

The fire and rescue department in the coastal town of Banting received a distress call and rescue teams were deployed.

"MMEA [Malaysian Maritime Enforcement Agency] have sent a ship, three boats and a helicopter to the location involving 35 officers and personnel and we are also assisted by other enforcement authorities including the Fire and Rescue Department, marine police and Civil Defence Department," said the agency's operations director Ibrahim Mohamed.

The travellers are thought to have been heading to Aceh, Indonesia, from Malaysia and reportedly did not have any valid documents. All those on board are believed to be Indonesians.

"This was an illegal boat and all the passengers were Indonesian," Muhammad Zuri, on official with the Malaysia Maritime Enforcement Agency (MMEA), told Reuters.

Contradictory reports also claim the boat was heading to Malaysia.

Hundreds of poor Indonesians frequently travel to Malaysia to work in the oil palm plantations despite the government's regular crackdown on such illegal immigrants.