Two lifeboats, coastguard helicopters, a ferry and other boats were involved in the desperate search for any remaining survivors, hampered by thick fog and difficulties in locating the crashed helicopter near rocks.
The Super Puma L2 was ferrying personnel from the Borgsten Dolphin oil platform in the North Sea to Sumburgh Airport when contact was lost two miles south-west of Shetland as it came in to land at 6.20pm last night.
It had 18 people, including two crew, on board and was operated by Canadian firm CHC. Rescuers plucked 15 survivors from the sea and flew them to Gilbert Bain Hospital in Lerwick. At least one person was carried by stretcher to a waiting ambulance. The extent of their injuries was not immediately known.
The crash raises further questions about the safety of using helicopters to ferry staff to and from North Sea fields. It is the fifth serious accident to occur in as many years.
In April 2009, a Super Puma L2 travelling from BP's Miller oil platform plunged into the North Sea with the loss of 16 oil workers and both pilots after suffering a catastrophic failure in its gearbox.
Nineteen people were rescued safely off Shetland following another ditching, this time of a CHC helicopter in October last year.
Jim Nicholson, RNLI rescue co-ordinator, said of the latest incident: "I believe the helicopter is in a fairly inaccessible position near the cliffs. There's quite a lot of tide in that area so any person in the water could be carried some distance away. It will be becoming much more difficult with darkness, but I have no doubt those involved are putting in every effort to try to obtain the best possible outcome."
The NorthLink-owned Hjatland ferry, which had been bound for Orkney with 201 passengers, was turned around and sent along with a freight ship to help lifeboats from Aith and Lerwick. A fishing boat was also assisting in the search.
In a statement, Pat Rafferty, Scottish Secretary of Unite, the union which represents many oil workers, said: "Our immediate thoughts are with those people and their families and we can only hope for good news, although as time goes on the situation becomes more worrying.
"Fifteen people have thankfully been rescued and accounted for, unfortunately some with injuries, and their rescue is testimony to the bravery and skills of the rescue services. This brings into sharp focus once again the precarious nature of the transportation of workers to and from offshore platforms. The health and safety of working people is our priority and we will be watching events closely."
CHC said it had no further details about what caused the crash, but confirmed that air traffic control lost contact with the Super Puma L2 at 6.20pm. A spokesman added: "We can confirm there were 16 passengers on board and two crew. The Maritime Coastguard helicopter from Sumburgh is on the scene, along with other rescue services."
Police are treating the crash as a major incident and were co-ordinating with the Maritime and Coastguard Agency (MCA). A Police Scotland spokeswoman said: "A total of 18 people were reported to be on board the helicopter which went down two miles off the coast of Sumburgh.
"The search is currently ongoing involving a number of agencies, co-ordinated by MCA, and so far 15 people have been uplifted to Gilbert Bain Hospital in Lerwick."
Officials from the Air Accidents Investigation Branch (AAIB) were due to arrive in Shetland to begin their investigation today.
A spokesman for the Department for Transport said: "The AAIB is aware of the incident and has deployed a team."
CHC suspended flights using Super Puma EC 225s after one ditched in the North Sea south of Shetland in similar circumstances in October.
All 19 people on board were rescued safely following the incident off Fair Isle, about 32 miles south of Shetland.
In May, all 14 people on board another EC 225 were pulled from the sea alive when their helicopter came down around 30 miles off the coast of Aberdeen during a flight to a rig.
Super Puma EC 225s were grounded in the wake of the two incidents, but services resumed earlier this month.
CHC has set up a helpline for concerned relatives on 01224 296 866.