In the latest drama to hit ferry sailings between the North and South Islands, the Connemara was tugged back to Wellington early on Friday morning after the mishap.
Wellington Harbourmaster Grant Nalder told Radio NZ the ferry, run by private operators Bluebridge, lost power about 10.30pm as it was sailing off the south coast of Wellington, bound for Picton.
The incident occurred in thankfully light winds, and the Connemara was drifting southeasterly, away from land.
Transport Minister Simeon Brown called the power outage an "unfortunate incident" that would prompt the Connemara's grounding.
"The vessel won't be allowed to go back into service until (Maritime New Zealand) has investigated and is assured that it is safe for it to do so," he told Radio NZ.
Bluebridge said 24 passengers, 13 freight drivers and crew were on board the overnight freight sailing, which returned to its Wellington wharf at sunrise on Friday.
The near-miss is another in a series of alarming Cook Strait incidents from both Bluebridge and state-owned Interislander ferries.
In June, the Interislander Aratere ferry ran aground shortly after leaving its dock in Picton, while in January 2023, the Kaitaki issued a mayday after losing its engines off Wellington's rocky south coast.
In that incident, life jackets were offered to passengers - which numbers more than 800 - in three-metre high swells.
The government is considering plans to replace the ageing state-owned ferries after scuppering the previous government's proposal to build two rail-enabled ferries, citing a cost blowout.
The sea route is a crucial freight link between New Zealand's two biggest islands, recognised as part of State Highway 1.
It is also marketed as an iconic tourism experiences, though the spate of incidents has clouded that assessment.
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