"It was very scary. I grabbed the kids and rushed outside of the house," said Cocos police officer Steve Lame speaking to AFP by telephone.

There were no reports of injury or structural damage, he said. The police had carried out an inspection and all the infrastructure was intact and the electricity supply was not affected, he said.

While an earthquake of that magnitude is usually very destructive, "the actual effects felt here were quite mild," he said. "Just the houses were shaking."

"It seemed to be more of a sever tremor than an earthquake," he said.

"We're very small and isolated islands so I guess we were pretty lucky."

The quake was measured at 7.2 on the Richter scale in Western Australia, Lame said. Earlier reports from the French seismological observatory based in Strasbourg put the quake at eight on the open-ended Richter scale.

The epicentre of the quake, which occurred at 1444 GMT, was situated at latitude 11.57 degrees south and longitude 99.6 degrees east, the observatory said in a statement.

The islands, mostly flat and built on coral, are situated just south of Indonesia, about halfway from Australia to Sri Lanka.

The magnitude of the temblor, which was at the top-end of the Richter scale, is usually associated with cracks appearing in the ground and building damage and collapses. In coastal and island areas, there is also sometimes a risk of a tsunami, or tidal wave, being caused.

The Cocos Islands has a population of around 650.