Photos posted on social media show passengers clinging to the boat. [Courtesy]

At least 12 people are dead after a ferry ran aground and took on water off Indonesia's coast, forcing terrified passengers to leap into the sea and wait for rescue.

Passengers snapped dramatic photos as they clung to railings onboard the sinking vessel which was carrying up to 139 people and didn't have enough life jackets for everyone.

Pictures show huge waves swamping the listing ferry, people wearing orange life jackets as they float in the sea, and cars and trucks sinking in the turbulent water.

One of the vehicles that sank was a secure car carrying 30bn Indonesian rupiah (£1.5m) in cash from a bank.

Terrified passengers cling to the ferry - with a sign reading "Safety First" in the background. [Courtesy]

Footage captured earlier shows scenes of panic onboard as people put on flotation vests while children scream and the boat is whipped by strong winds.

The KM Lestari ferry was sailing from Bira, on Sulawesi island, to Pamatata, on Selayar island, when disaster struck in strong winds and 13ft waves.

Passengers hold onto ropes on the side of the boat. [Courtesy]

Officials said the ferry ran aground after suffering engine damage.

The hull was damaged, causing the vessel to take on water and list.

Rescuers raced to the scene to pull passengers out of the water in heavy rain. The effort was hampered by poor weather and rough sea conditions.

There weren't enough life vests for everyone onboard, it was claimed. [Courtesy]

A spokesman for the Selayar Islands Regency told Metro TV that there weren't enough life jackets for everyone on board.

The ferry's manifest listed 139 passengers and 48 vehicles, including two buses and 14 trucks.

People float in the sea after the vessel began taking on water. [Courtesy]

Officials have told local media that the ferry was about 15 minutes from port when it began to sink on Tuesday afternoon.

Cars sink after being washed off the ferry. [Courtesy]

The disaster happened a day after Indonesia called off a two-week operation to retrieve the bodies of nearly 200 passengers thought to have drowned in one of the world's deepest volcanic lakes.

An overcrowded wooden ferry capsized during a storm on the 1,500-ft deep Lake Toba on June 18 as passengers headed home after the Eid holiday marking the end of the Muslim fasting season.

Just 18 passengers survived. Three were confirmed dead and nearly 200 are still missing two weeks on.

The cold, murky lake is far deeper than any scuba diver can go, and it has never been completely surveyed.

The recovery operation was hampered by technical and logistical hurdles.