The frantic search for nearly 300 people, most of them schoolchildren, missing after a South Korean ferry capsized extended into a second day Thursday, as distraught relatives maintained an agonising vigil on shore.

Nine people were confirmed dead, but with every hour that passed fears mounted for the 287 still unaccounted for after the multi-storey vessel with 475 on board suddenly listed, capsized and then sank 20 kilometres (13 miles) offshore.

Naval and coastguard vessels used floodlights and flares to keep the search operation going through the night, but strong currents and low visibility hampered diving teams' efforts to access the vessel in the hope of finding survivors trapped in air pockets.

"Honestly, I think the chances of finding anyone alive are close to zero," a coastguard official told an AFP journalist on one of the boats at the capsize site.

The coastguard said 179 people had been rescued, a figure little changed from the previous evening.

The tragedy has stunned a country whose rapid modernisation was thought to have consigned such large-scale accidents to the past.

If the missing are confirmed dead it would become one of South Korea's worst peacetime disasters -- all the more traumatic for the number of children involved.

A total of 375 high school students were on board, travelling with their teachers to the popular island resort of Jeju.

President Park Geun-Hye voiced shock and pain at the "tragic" accident.

"Please do not give up until the very last moment," she said during a visit to the national disaster agency's situation room in Seoul late Wednesday.

It was still unclear what caused the 6,825-tonne Sewol to sink.

Numerous passengers spoke of a loud thud and the vessel coming to an abrupt, shuddering halt -- suggesting it had run aground or hit a submerged object.

Captain denies ran aground

But the captain, Lee Joon-Seok who survived and was being questioned by investigators insisted it had not run aground.

"It didn't hit any rocks," the 60-year-old told the Dong-A Ilbo newspaper.

"The ship just sank suddenly. I don't know a clear reason," he said.

Distressing mobile phone footage taken by one survivor emerged Thursday, showing the panic on board with one woman desperately screaming "The water's coming, the water's coming."

On Jindo island where anxious relatives wrapped in blankets saw out the night in a local gymnasium waiting for news, there was a mood of angry desperation.

"Get my child out of that ship. Dead or alive," one distraught father repeatedly shouted to any official he saw.

Parents kept returning to pore over the names of those rescued that had been posted in the gym and on the harbour quay, but there were no additions to the list.

Some were outraged by survivor testimony that passengers had been told not to move after the ferry first ran into trouble.

"We must have waited 30 to 40 minutes after the crew told us to stay put," said one rescued student.

"Then everything tilted over and everyone started screaming and scrambling to get out," he said.

Rescuers said they feared hundreds had been unable to escape the vessel before it became completely inverted and sank, with only a small section of keel sticking above the surface.

Don't run away prime minister!'

When South Korean Prime Minister Chung Hong-Won visited the gymnasium in Jindo on Thursday morning, he was jostled and shouted at, and water bottles were thrown.

"Don't run away, Mr. Prime Minister," one mother said, blocking Chung as he tried to leave. "Please tell us what you're planning to do."

Among the nine confirmed dead were three students, one teacher and a crew member.

The initial distress signal from the Sewol came at 9:00am Wednesday, and many survivors were picked up by small commercial vessels that got to the scene ahead of the navy and coastguard.

Television footage showed terrified passengers wearing life jackets clambering into inflatable boats that pushed right up to the rails of the listing vessel as it sank.

The US 7th Fleet sent an amphibious assault ship on patrol in the area to help, while White House spokesman Jay Carney said Washington was ready to provide "any assistance" needed.

Scores of ferries ply the waters between the South Korean mainland and its multiple offshore islands every day, and accidents are relatively rare.

In one of the worst incidents, nearly 300 people died when a ferry capsized off the west coast in October 1993.

If the current toll rises as feared, it could end as the nation's biggest disaster since a Seoul department store collapsed in 1995, killing more than 500 people.