HILTON HEAD ISLAND, S.C. (AP) _ The Coast Guard rescued 71 people from a party fishing boat Thursday after it developed engine trouble and began taking on water about eight miles east of here, authorities said.

The people were taken to Harbour Town Yacht Basin, and boat was taken to Palmetto Bay Marina to be hauled from the water, Coast Guard officials said.

The 65-foot fishing boat Drifter began taking on water after it apparently developed a hole in the engine room, said Petty Officer 2nd Class Hugh Edge of the U.S. Coast Guard Station at Tybee Island, Ga.

Coast Guard officials boarded the boat and were trying to determine what had caused a leak near the rudder shaft, said Petty Officer Anthony Brown.

''It was a dangerous situation,'' he said. ''The vessel was taking on water faster than it could be pumped out. When we arrived, there was approximately three feet of water in the engine room and it was still coming in.''

The Coast Guard, which received a distress call about 9:50 a.m., dispatched two helicopters and the cutter Cape Upright to the scene about eight miles east of Hilton Head Island's South Beach.

Edge said that all those aboard the vessel were transferred to the Cape Upright by about 11:15 a.m.

The boat left Harbor Town at 8 a.m. for a fishing trip to an artifical reef off Hilton Head, said Cindy Holland, the local harbormaster. The boat, owned by Stan Maurer, had 68 passengers and three crew members on board, Coast Guard officials said.

Edge said there were no injuries.