Seven people have been confirmed dead in a car ferry that caught fire off the coast of Greece yesterday, but  rescue teams this morning rescued all remaining passengers stranded on board after working through the night in rough weather.

As some of the rescued passengers arrived in Italy, Italian Prime Minister Matteo Renzi told reporters that four more bodies had been recovered. One man was reported dead yesterday. Another two bodies were found later.

Renzi, speaking at a year-end media conference in Rome, praised the work of rescuers, who had helped avoid a "massacre".

The Norman Atlantic was carrying 478 passengers and crew and more than 200 vehicles.

A Syrian carrying Maltese identity documents was among those rescued yesterday.

After initial rescue efforts were impeded by bad weather that stopped other ships getting close, Italian and Greek helicopter crews began the airlift yesterday afternoon.

Rescuers worked through the night to pull people off the multideck ferry, the Italian navy said. Several passengers were flown to Galatina in southern Italy.

A medical team and a flight operator had boarded the vessel to assist the passengers and crew as the rescue proceeds, a statement from the Italian navy said. Its San Giorgio amphibious transport ship coordinated the rescue operation.

A merchant ship carrying a reported 49 of the ferry passengers, including four children, arrived in the southern Italian port of Bari today, and Italian Admiral Giovanni di Tullio told Sky TG24 they would receive medical attention.

Bad weather hampered efforts overnight to attach cables to the ferry for towing, and a tug boat is expected to reach the ship to make another attempt today, Greece's shipping minister Miltiadis Varvitsiotis told Sky TV.

No decision had been made on where the ferry would be taken, he said, although there had been expectations that it would be towed to the Italian port of Brindisi.

Eighty five people had been transferred to the San Giorgio by 8am and one person suffering from heart disease was taken to the Italian mainland by helicopter, the navy said.

The Italian-flagged ferry, chartered by Greek ferry operator Anek Lines, was sailing between Patros in western Greece to Ancona in Italy.

The cause of the fire has yet to be determined but the Greek coastguard said might have started in the parking area.