The Canadian Fisheries patrol vessel Sygnus intercepted the Canadian longline fishing boat Steven B about 280 miles north of Bermuda on Wednesday night.

Armed Fisheries officers boarded the ship, which is now being towed back to Halifax, Nova Scotia by the 287-foot patrol vessel.

The ship is charged with illegal fishing in international waters. The penalty is a fine of up to $100,000 and loss of licence, though Steven B , owned by Scotia-Bermuda Ltd., holds no Canadian licence.

"This is pretty extreme,'' said a Fisheries source, who noted the Canadian media was quoting legal experts as saying the charge would not stick.

Earlier, Government had refused a request from the Canadians to lift the ship's licence to fish for tuna within Bermuda's 200-mile exclusion zone.

The Canadian fishermen had bought their licences in good faith, and Environment Minister the Hon. Gerald Simons was concerned Bermuda would be liable for damages if they were arbitrarily altered or lifted.

Mr. Simons said he was surprised by the latest Canadian move, which came on the same day Government received a fax from Canadian Fisheries Minister the Hon. Brian Tobin requesting a top-level meeting over the fishing dispute.

"We said we'd be very happy to have such a meeting,'' Mr. Simons said.

As for the arrest, "that incident surprised us. From our point of view, we haven't gotten directly involved, because the incident took place well outside of our waters and no Bermudians were on board.'' But Mr. Simons understood the Canadians were concerned the Steven B was cutting into the 500-ton quota the Canadian fleet was allowed for tuna as a member of the International Commission for the Conservation of Atlantic Tuna.

"The fish caught here will barely make a dent in that quota,'' Mr. Simons said. But "the Canadian fleet didn't anticipate going to fish (for tuna) until late summer. The Steven B , by holding a licence to fish in Bermuda waters, was "getting a jump on the Canadian fleet''.

Although licensed to fish in the 200-mile exclusion zone, the Stephen B was doing much of its fishing in international waters.

It was among seven Canadian and three Taiwanese fishing vessels licensed to fish in Bermudian waters this year.

While some have departed, it was believed three of the Canadian ships -- the Renee and Trevor , the East Pac 2 , and the Flying Dart -- were still working.

The Fisheries source said he did not believe the Canadians would enter Bermuda waters to try to seize those ships. "That would be creating an international incident.'' As part of the terms of their licences, the Canadian captains were to take up to two Bermudians aboard each trip to learn longline fishing.

Mr. Simons said most Bermudian fishermen worked the reef close to Bermuda's shores. Since Bermudians were not working the Island's protected waters farther from shore, a limited number of foreign vessels had to be licensed.

Otherwise any foreign ship would be able to fish in the waters.

At one time, Bermuda licensed 52 foreign ships, but the number had been gradually decreased, he said.