More than 280 people, many of them students from the same school, are missing after a ferry capsized off South Korea.

Six of the 462 passengers on board the ferry have died and coastguard officials said another 174 have been rescued.

Frantic rescue operations continued late into the night under light from flares, but hope is fading for the 284 people still missing.

It is not yet clear why the Sewol ferry listed heavily on to its side and capsized in apparently calm conditions off South Korea's southwest coast.

However, some survivors spoke of a loud noise prior to the disaster.

"It was fine. Then the ship went 'boom' and there was a noise of cargo falling," said Cha Eun-ok, who was on the deck of the ferry taking photographs at the time.

"The on-board announcement told people to stay put ... people who stayed are trapped," she said in Jindo, the nearest town to the scene of the accident.

The families of those still missing faced agonising uncertainty as divers searching for those trapped in the largely submerged ship were forced to suspend their work until daybreak tomorrow.

Most of the passengers on board the ferry appeared to have been teenagers and their teachers from a secondary school near Seoul.

They had been on a field trip to Jeju island, about 60 miles south of the Korean peninsula.

There was confusion over the number of people missing after an official from the Danwon High School in Ansan said earlier that all of its 338 students and teachers had been rescued.

But that could not be confirmed by the coastguard or other officials involved in the rescue, and did not appear to tally with more up-to-date assessments of survivor numbers.

The school official asked not to be identified.

Adding to the confusion, the Ministry of Security and Public Administration initially reported that 368 people had been rescued and that about 100 were missing.

But it later described those figures as a miscalculation, turning what had at first appeared to be a largely successful rescue operation into potentially a major disaster.

There was also uncertainty about the total number of passengers on board, as authorities revised the figure down from 477, saying some had been double counted.

It added to growing frustration and anger among families of the passengers.

The ferry began to list badly about 12 miles off the southwest coast as it headed for Jeju.

A member of the crew of a local government ship involved in the rescue, who said he had spoken to members of the sunken ferry's crew, said the area was free of reefs or rocks.

He said the cause was likely to be some sort of malfunction on the vessel.

There were reports of the ferry having veered off its course, but coordinates of the site of the accident provided by port authorities indicated it was not far off the regular shipping lane.

Several survivors spoke of hearing a "loud impact" before the ship started listing and rolling on its side.

Within a couple of hours, the Sewol was lying on its portside.

Soon after, it had completely turned over, with only the forward part of its white and blue hull showing above the water.

Coastguard vessels and private fishing boats scrambled to the rescue with television footage showing rescuers and fishermen pulling passengers in life vests out of the water as their boats bobbed beside the ferry's hull.

Other passengers were winched to safety by helicopters.

The ferry left from the port of Incheon, about 30km west of Seoul, late last night.

It sent a distress signal early this morning, the coastguard said, triggering a rescue operation that involved almost 100 coastguard and navy vessels and fishing boats, as well as 18 helicopters.

A US navy ship was at the scene to help, the US Seventh Fleet said, adding it was ready to offer more assistance.