At least four people died and 43 were rescued after an inflatable boat carrying migrants capsized in the English Channel.
The coastguard was alerted to the emergency in the waters off Kent shortly before 3am (UK time) on Wednesday.
A major search-and-rescue mission was launched involving the British and French navies, UK Border Force and Kent Police.
Rescue teams, life boats, an air ambulance and a fishing boat all assisted in the rescue, the agency said.
Four died and more than 30 people were pulled from the water by rescuers, a government spokesman said.
A fisherman told Sky News migrants surrounded his boat in the early hours of the morning “screaming for help”.
The skipper, named only as Raymond, said his crew saved 31 people stranded in the Channel, adding: “It was like something out of a Second World War movie – there were people in the water everywhere, screaming.”
Footage showed a group of people, squashed inside a sinking dinghy which was filling with water, being hauled up over the side of a boat with rope.
It understood the number of fatalities could rise.
The tragedy came a day after Prime Minister Rishi Sunak unveiled new measures in an attempt to curb Channel crossings, telling the House of Commons: “We have to stop the boats.”
On Wednesday, Mr Sunak expressed his sorrow at the “capsizing of a small boat” in the English Channel, telling MPs there had been a “tragic loss of human life”.
More than 44,000 people have made the dangerous crossing this year, government figures show.
A government spokesman said: “At 0305 today, authorities were alerted to an incident in the Channel concerning a migrant small boat in distress.
“After a co-ordinated search-and-rescue operation led by HM Coastguard, it is with regret that there have been four confirmed deaths as a result of this incident, investigations are ongoing and we will provide further information in due course.
“This is a truly tragic incident. Our thoughts are with the friends and families of all those who have lost their lives today.”
Government sources told the PA news agency 43 people were rescued.
Temperatures are likely to have been freezing in the Channel overnight as a cold snap swept across the UK.
The temperature recorded at Dungeness overnight was between 0ºC and 1ºC, according to the Met Office.
Giving a statement in the House of Commons, UK Home Secretary Suella Braverman said: "This is the day we dread ... crossing the Channel in unseaworthy vessels is a lethally dangerous endeavour, it is for this reason above all that we are working so hard to destroy the business model of the people smugglers, evil, organised criminals who treat human beings as cargo.”
She said it was a "sobering reminder" of why the government is intent on bringing an "end to these crossings".
Enver Solomon, chief executive of the Refugee Council, said it was devastating news.
“Our thoughts are with all those affected and we pay tribute to the rescue teams working on such a dreadful incident.
“Sadly, this is not the first time we are waking up to such devastating news of people having lost their lives on a harrowing journey to Britain in search of safety.
“We will be monitoring the situation carefully and in the meantime we thank all those people who have expressed their sympathy and solidarity with those affected by today’s horrendous incident.”
The Marine Traffic radar website showed vessels clustering in an area of the channel between Lydd in Kent and Cap Gris Nez in France.
RNLI lifeboats were launched from Dover at 3.07am, followed by vessels from Ramsgate and Hastings.
A spokesman for HM Coastguard said coastguard teams from Deal, Dungeness and Folkestone coastguard also attended.
"HM Coastguard helicopters from Lydd and Lee-on-Solent and one from the French Navy are involved," said the spokesman.
"A fishing vessel in the area is also assisting in the rescue. South East Coast Ambulance and Kent Police are working with us."
The incident was ongoing, they added.
British Red Cross director of refugee support, Alex Fraser, said: “That anyone is making this journey in these temperatures shows just how desperate people are.
“Nobody puts their life at risk like this unless they feel they have no other option, and until we have more accessible safe routes for people to claim asylum, there is a danger we may see more such incidents.
“Our thoughts are with those on the boat, their families and those involved in the ongoing rescue mission.”
Ministers have singled out Albanians as accounting for more than a third of the migrants who crossed the Channel in the first nine months of the year, compared with the 3 per cent recorded in the whole of last year.
Mr Sunak told the Commons the changes the government plans to make mean the vast majority of claims from Albania will be considered unfounded and “those individuals can be swiftly returned”.
The government also aims to send Border Force officials to Albania to disrupt organised crime and stop people coming to the UK illegally.
Mr Sunak said the government also intends to restart flights to Rwanda, so “those here illegally who cannot return to their own country can build a new life there”.
“Early next year we will introduce new legislation to make it unambiguously clear, that if you enter the UK illegally you should not be able to remain here," he said.
“Instead, you will be detained and swiftly returned, either to your home country, or to a safe country where your asylum claim will be considered. And you will no longer be able to frustrate removal attempts with late or spurious claims or appeals,” Mr Sunak said.
“And once removed you should have no right to re-entry, settlement or citizenship.”
Small boats carry an average of 50 people.
Last November 32 people died, including an unborn baby, while trying to cross the English Channel in a dinghy, despite desperate calls to coastguard services on both sides of the Channel.
A man was arrested in connection with the incident.