* 108 dead, hundreds missing after quake generates freak wave
* Popular surfing spot devastated
(Updates number of dead and missing)
(Deletes extraneous reference to missing para 12)
By Sunanda Creagh and Telly Nathalia
JAKARTA, Oct 26 (Reuters) - A tsunami that pounded remote islands in western Indonesia following an earthquake off the coast of Sumatra killed more than 100 people, officials said on Tuesday, and hundreds more were missing.
The 7.5 magnitude quake hit 78 km west of South Pagai, one of the Mentawai islands, late on Monday. Local legislator Hendri Dori Satoko told Metro TV the latest toll was 108 dead and 502 missing.
Most buildings in the coastal village of Betu Monga were destroyed, said Hardimansyah, an official with the regional branch of the Department of Fisheries.
"Of the 200 people living in that village, only 40 have been found. 160 are still missing, mostly women and children," he told Reuters by phone. "We have people reporting to the security post here that they could not hold on to their children, that they were swept away. A lot of people are crying."
Hardimansyah, who has only one name, said 80 percent of the houses in the area were damaged and food supplies were low.
A tourist boat carrying between eight and 10 Australians has been out of radio contact since the quake, Australia's Department of Foreign Affairs and Trade said in a statement.
The Macaronis surfing resort on North Pagai island was also hit. In an official press release, World Surfaris said Macaronis had "experienced a level of devastation that has rendered the resort inoperable".
SURF RESORT DEVASTATED
Reports via Facebook from a surfer at the resort suggested that all villas had been "wiped out" by the tsunami.
A report posted on the Surfaid website by one of the aid organisation's staff members described a three-metre-high tsunami crashing through the resort and boats knocking together, then bursting into flames.
Guests and crew from one boat were washed into the jungle and took more than an hour to find their way back to the beach, the staff member, Tom Plummer, said.
"There was a lot of debris floating in the water, including bar stools and other pieces of furniture from Macaronis Resort," he said.
Satoko, head of the regional government in the affected area, told Metro TV that some of the missing may have taken refuge on higher ground.
Local police on the Mentawai islands were searching for missing people and setting up emergency posts, said Ronald, a police officer at Sikakap district police station.
"We are predicting that people will need food supplies and shelter. The rain is coming down very hard, the wind is very strong," he said.
Mudjiarto, the head of the disaster response unit at the Health Ministry, told Reuters that two bodies had been found near Sipora island and that several people were still missing.
In South Pagai island, waves penetrated about 600 metres into coastal villages, while in North Pagai island, waves reached to the roof of local houses, he said.
In December 2004, a tsunami caused by an earthquake of more than 9 magnitude off Sumatra killed more than 226,000 people. It was the deadliest tsunami on record. (Additional reporting by Michael Perry in Sydney; Editing by Andrew Marshall)
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