Images of the ferry show flames licking the side of the boat and plumes of smoke pouring from the entire length of the vessel.
The Sorrento was making its way from the holiday town Palma, the capital of the island of Mallorca, to Valencia on the mainlaind, with 170 passengers on board when it caught fire.
Marine resuce teams were sent out this afternoon to the ship, which belongs to Acciona Trasmediterránea, and had set sail shortly before midday, Spanish newspaper El Pais reported.
Three crew members were taken for smoke inhalation treatment by helicopter.
The Balearic Port authority tweeted: "Due to a fire, the Sorrento may sink in its current location."
A spokesman from the marine rescue service said passengers are being evacuated from the ferry 18 miles west of Dragonera, a small islet west of Mallorca.
http://www.express.co.uk/news/world/573527/Spanish-ferry-fire-Palma-Valencia
