Passenger Katie Donohue: "He just went crazy"

Six US and two Spanish tourists allegedly had their lives threatened by a dive boat captain on board their Great Barrier Reef charter boat.

They may now sue the owner.

Queensland police are investigating how the eight-day pleasure cruise from Port Douglas to the reef went so horribly wrong.

'Nightmare' trip

The 29-year-old captain was said by passengers to have threatened them with a flare gun and left the boat "zooming at full speed" towards the reef with no-one at the wheel.

The captain was tied up for the return journey

The passengers and other crew members managed to jump Captain Troy Dallman as the 20m long Reef Explorer hit a reef. "It was a nightmare from day one," New York doctor Federico Farin said.

"It was almost like television," he said.

Australian media on Saturday said the skipper had been admitted to hospital on Thursday Island after being tied up and left in a bunk during the 22-hour trip back from the reef.

Minister concerned

"The Queensland government ... is concerned about the well-being and safety of passengers on vessels operating in Queensland waters," Queensland Transport and Main Roads Minister Steve Bredhauer said.

"I have asked for a thorough investigation of allegations relating to this incident and expect a detailed report next week," he said.

Boat owner Diane Chester said she had offered to refund the 3,000 Australian dollars ($1,800) cost of their eight-day trip and their plane fare from Thursday Island.

"Basically it was a very awkward, hard situation. I really do feel for them," she said.

However the solicitor acting for the tourists, Michael Miller, said the offer was inadequate for a group of eight people who believed they were going to die.

The incident is another blow to the Queensland diving industry.