UPDATED 6:30PM The Independent Police Conduct Authority is investigating following a double fatal police pursuit today. 

Earlier today, Central Communications issued a dispatch notifying local Palmerston North units of a vehicle of interest possibly being driven by a 15-year-old male who was breaching his bail conditions.

The 15-year-old driver died later this afternoon in hospital.  His passenger, believed to be a 12-year-girl, died at the scene.

A second passenger a 15-year-old female, who was the back seat passenger, remains in Palmerston North Hospital in a serious condition.

At about 1.30pm an officer saw the wanted Subaru being driven on Monrad Street.

Police signalled for the vehicle to pull over and the driver failed to stop.

The Subaru continued driving, travelling onto Pioneer Highway and crashed into a ditch hitting a power pole at the intersection of Shirriffs Road.

Police say enquiries this afternoon have revealed that the Subaru was stolen. 

"Our staff always assess the risk of whether or not to pursue a driver who fails to stop for Police, and continue to monitor risk factors throughout," a police spokesperson said.

"We take these decisions very seriously, and need to maintain a balance between ensuring public safety, and upholding the law.

"The last thing any Police officer wants to have happen when they are on shift is for any incident to end in a fatality, these incidents are devastating for all those involved."

Police said the officer involved is receiving support.

Three investigations will now take place, the Serious Crash Unit, an internal Police investigation and an investigation carried out by the Independent Police Conduct Authority.