A terrifying ordeal for school holiday travellers, caught up in a ferry collision in the Bay of Islands

The skipper of a passenger ferry between Paihia and Russell was critically injured, when another boat collided with the ferry about midday yesterday.

Passengers have described the collision as a "hell of a bang" which threw one or two passengers overboard, and left families with young children shaken.

Transport Accident Investigation Commission spokesperson Simon Pleasants says investigators are at the scene, to begin a thorough 18 month investigation.

He says they'll be looking at any electronic information they can find, including any electronic tracking of the course the two vessels took.

The skipper remains in a critical condition in Auckland's Middlemore Hospital.