A small Dutch passenger ferry capsized on Friday after a collision with a German cargo ship in a busy shipping canal south of Amsterdam and emergency services were searching for survivors.

The ferry was floating upside down after the accident but it was not immediately clear how many people, if any, were aboard the vessel, which is normally used by commuters, sometimes with their bicycles. The ferry's captain was missing.

'We cannot be exactly sure, but at this moment we think there was one person on board (the passenger ferry),' police spokesman Carine Portengen said.

'The first hour is crucial to save someone who is in the water ... so the chances are very unlikely that if he (the captain) is in the water that he will be found alive.'

The passenger boat, capsized after the incident and was floating upside down in the water, Portengen said. The cargo ship was an inland freight ship from Germany.

Police said they were questioning the captain of the cargo ship and he had tested negative for alcohol. It was not yet known how many people were on board the cargo ship at the time of the accident.

Fire-fighters and divers using a helicopter with thermal sonar were searching the canal. The accident shut down shipping traffic on the canal.

It was still dark at the time of the accident, which took place at about 1 am near the town of Nieuwer ter Aa about 30 km south of Amsterdam in the busy Amsterdam-Rhine Canal.

The 72-km long canal was built to connect the port city of Amsterdam to the Rhine, a major European shipping artery. Foot and bicycle passenger boats in the Netherlands are usually smaller than normal ferries.-Reuters