'According to our informant, it is a two-metre-long shark, grey in colour,' a police spokeswoman said.

The shark was first spotted in Tai Tam Bay, about one kilometre off Stanley Main Beach, at around 11.30am yesterday. The man who called in the sighting was alone on a rubber boat when he saw it.

He reported it to police on his mobile phone before returning to shore. 'He told our officers that he last saw it cruising about 50 metres off the beach, before swimming away,' the spokeswoman said.

Marine police launches were sent to check and a Government Flying Service helicopter was dispatched in the afternoon, but no shark was found.

No shark flag was hoisted at the beach and no notices were put up advising people to avoid the water.

A spokesman for the Leisure and Cultural Services Department said a shark flag was not hoisted because the sighting had not been confirmed by police. 'Patrols have been stepped up at the 36 beaches, and staff and lifeguards have been asked to stay alert,' he said.

All 36 beaches are protected by shark nets, he said. The nets were installed after four swimmers were killed by sharks in the early 1990s.

Yesterday's report failed to deter people from entering the water, as the sun appeared after several days of rain brought in by severe Tropical Storm Talim.

A tourist from Sweden, Alex, said: 'I haven't seen any sharks. I guess we'll be safe here, though, because of the shark-proof nets.'

Isabel Chang, 19, said: 'I haven't seen any sharks today and don't know anyone who has.'

To celebrate the Dragon Boat festival, also known as Tuen Ng festival, races will be held in various locations on Saturday.

In Stanley, 250 teams will take part in this year's Stanley International Dragon Boat Championships.

Executive secretary Connie Cheng Tak-lai, of the Stanley Residents Association, said the sighting would not affect the event.

But marine police would be asked to step up patrols in the area, and the association will have its own boats patrolling during the races.