The search was abandoned after three boats, police officers from Dunedin and Oamaru and volunteer firefighters failed to find anything in the water, on the coast, or any abandoned boat trailers near launching ramps.
Sergeant Tony Woodbridge, of Oamaru, said police received a report from a Kakanui resident who saw what they thought was a red flare off the coast, between Kakanui and the Moeraki Lighthouse.
''Through investigation, we've had another resident of Kakanui who was out walking and someone from Hampden Beach who have both seen a bright orange-red light in the sky about the same time.''
The Kakanui Volunteer Fire Brigade, Oamaru police and a road policing unit from Dunedin were deployed to scour the coastline.
Two boats out of Moeraki, Observer and Chevallier, plus Willere from Oamaru, also joined the search.
The search was scaled down at 8pm.
''We've got no reports of anybody missing, so it's a bit of a mystery what was seen, but we've been out and had a good look.''
