Tug boats are working to prevent a bulk carrier from smashing into cliffs at the Royal National Park, south of Sydney, after it departed Wollongong in wild weather and lost power.

The 170-metre Hong Kong registered bulk carrier Portland Bay dropped anchors about one nautical mile off Garie Beach between Sydney and Wollongong on Monday morning after losing power about 7.30am.

Premier Dominic Perrottet said the state and Commonwealth were working together to rectify the situation.

“It’s a precarious position,” he told reporters on Monday morning.

The SL Diamantina tug boat pointed the bow of the ship out towards the open sea to try and slow its drift toward the coast.

A second tug boat, the Bullara, then arrived to attempt to tow the bulk carrier further away from the coast.

A third tugboat was expected to arrive about 4pm, NSW Port Authority chief operating officer John Finch said.

“We’ll start the process of retrieving the anchors and getting the vessel towed out to deep, safe water,” Mr Finch told reporters on Monday afternoon.

Eight-metre swells were putting pressure on the tug boats and slowing the operation down, but Mr Finch said it’s hoped the ship can be moved further offshore later on Monday night.

“Hopefully tomorrow morning this will all be over,” he said.

Plans to fly the ship’s 21 crew members to safety have been put on hold, due to weather making an air evacuation dangerous, and the ship’s anchors preventing it from drifting further towards the coast, he added.

“The master asked to keep his crew on board because at this point they are confident they can make an engine repair once they get out into safer waters,” Mr Finch said.

The crew have identified the suspected problem, in bearings inside the main engine, and believe they have the spare parts and staff on board to fix it.

“If there’s no further issues it should be a relatively straightforward repair,” Mr Finch said.

The ship isn’t carrying anything besides its own fuel and oil.

The Australian Maritime Safety Authority has sent a jet to the scene to provide communications and location data.

NSW Water Police, the Volunteer Marine Rescue service and the Navy are also responding as part of the operation led by the NSW Port Authority.

– AAP