Malaysia on Thursday formally declared the passengers and crew of missing flight MH370 to be presumed dead, a step that it said opens the door for compensation payments but which was angrily rejected by distraught relatives.

Malaysian authorities and the airline had until now refrained from drawing firm conclusions about the fate of the plane and its 239 passengers and crew, as many desperate next-of-kin continue to insist it may have landed safely somewhere.

But Thursday's declaration that MH370 was an "accident" was essentially a formal announcement that the plane had indeed crashed somewhere after its disappearance on March 8 and that all aboard had perished.

"It is therefore, with the heaviest heart and deepest sorrow that, on behalf of the government of Malaysia, we officially declare Malaysia Airlines flight MH370 an accident," civil aviation chief Azharuddin Abdul Rahman said in a televised announcement.

"All 239 of the passengers and crew on board MH370 are presumed to have lost their lives," he added.

Urging relatives to move forward, he said it was "important that families try to resume normal lives".

Malaysia Airlines later said it would begin contacting families to proceed with a "fair and reasonable" compensation process.

But Sarah Bajc, whose partner Philip Wood was on board the plane, was one of several relatives who poured scorn on the announcement.


'They are lying'

"I think they are lying," she said of the Malaysian government and airline.

"It could very well be that the plane crashed. But there is no evidence, and until there is evidence we just can't believe them. It is impossible to bring any closure until we have proof."

Many relatives have consistently accused Malaysia's authoritarian government and its flag carrier of a chaotic and bungled response to the plane's initial diversion that allowed the jet to disappear, and a subsequent cover-up. Those charges are strenuously denied.

The plane vanished en route from Kuala Lumpur to Beijing in one of history's great aviation mysteries.

Malaysia's government says satellite data indicates the plane inexplicably detoured to the remote southern Indian Ocean, which they suspect was due to "deliberate" action onboard.

But no evidence has turned up as to the fate of the plane, despite an ongoing Australian-led search of the supposed crash region -- the most expensive search and rescue operation in history.

Whatever happened, aviation analyst Gerry Soejatman said the declaration is important to allow all parties to move forward in the baffling case.

"Unless the declaration is made, it will be tough to initiate certain legal steps for insurance matters to take place," he said.

"It's a hard step for (families) to accept, but they have to bear in mind that someone has to pay them and everyone has to move on somehow. It's not easy but this is a fact."

Two-thirds of the passengers were Chinese nationals, and their furious accusations that Malaysia had concealed information drew China's government into the fray, straining bilateral ties when Beijing criticised the disaster response.

Speaking after Azharuddin's announcement, Chinese premier Li Keqiang called the loss of MH370 a "great misfortune".

"We also hope Malaysia can keep its promises to continue the investigation of the event, pay compensation and also comfort the families. But most importantly, they should use all means to try to find the victims," he said.


'Forge ahead' with search

Malaysian authorities say they launched investigations immediately after the disappearance, but they have so far released no findings, infuriating families.

Bajc said she was never contacted by Malaysian authorities, and knows nobody who was.

Many also question the theory that the flight veered toward the Indian Ocean. Azharuddin, however, said Malaysia would "forge ahead" with the search effort.

The government's awkward handling of Thursday's announcement also angered relatives, who have accused authorities and the airline of insensitivity in the past, and drew harsh criticism on social media.

A hastily scheduled press conference to announce the news was abruptly abandoned earlier Thursday after several family members rushed to the venue demanding to know why they were not briefed ahead of the public announcement.

The government later said separate arrangements had been made to communicate with kin, but relatives who spoke to AFP said they had not been contacted.

Elaine Chew, whose husband Tan Size Hiang was on the missing flight, said Malaysia's declaration is a blow to suffering families.

"I have a six-year-old daughter. I have told her that her father is missing. She wants him back for her birthday on March 14. How do I explain this to a six-year-old girl, all of a sudden?" she said.