A powerful earthquake off western Indonesia triggered a small tsunami that killed one man, damaged more than 150 homes and sent thousands of people fleeing to high ground.

The 7.7 magnitude earthquake hit late yesterday and caused a a 10-foot (three-metre) wave.

It was caused by the same fault, running the length of the west coast of Sumatra island, behind the 9.1-magnitude quake that triggered a massive tsunami in 2004, killing 230,000 people in a dozen countries.

Ade Edward, a disaster management agency official, said tremor was centred just 13 miles (20 kilometres) beneath the ocean floor and triggered a small tsunami that hit the island of Pagai.

He said a farmer was killed and some 2,000 people were seeking shelter today in emergency camps.

Crews from several ships are still unaccounted for in the Indian Ocean, he said.

The Mentawai islands, a popular surfing spot 175 miles (280 kilometres) from the coast, are sparsely populated and reports of casualties and damage have only just started arriving.

The earthquake also jolted towns along Sumatra's western coast - including Padang, which last year was hit by a deadly 7.6-magnitude tremor that left more than 700 dead. It prompted mosques to blare tsunami warnings over their loudspeakers.

"Everyone was running out of their houses," said Sofyan Alawi, who also said roads leading to surrounding hills were quickly jammed with thousands of cars and motorcycles.

"We kept looking back to see if a wave was coming," said 28-year-old resident Ade Syahputra.

Indonesia, the world's largest archipelago, is prone to earthquakes and volcanic activity due to its location on the Pacific 'ring of fire'.

A group of Australian surfers were on the back deck of their boat, anchored in a bay off the hardest-hit Mentawai islands, when the earthquake hit.

The large wave it generated caused it to smash into the vessel alongside them and a fire broke out on their boat, Rick Hallet told Australia's Nine Network.

"We threw whatever we could that floated - surfboards, fenders - then we jumped into the water," he said.

"Fortunately, most of us had something to hold on to ... and we just washed in the wetlands, and scrambled up the highest trees that we could possibly find and sat up there for an hour and a half."

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