Rescuers struggled with strong waves and murky waters on Thursday as they searched for hundreds of people, including two Chinese, still missing after a South Korean ferry capsized more than 39 hours ago.

More than 500 divers, 169 vessels and 29 aircraft were involved in the rescue operation, about 20 kilometers off South Korea's southwestern coast, the country's coast guard said.

As of press time, 20 people were confirmed dead, with 276 still unaccounted for after the vessel with 475 on board suddenly listed, capsized and then sank on Wednesday morning during a journey to well-known holiday destination Jeju, according to South Korean Yonhap News Agency.

According to the South Korean coast guard, a Chinese vehicle was on board and two Chinese nationals are believed to be missing, Chinese foreign ministry spokeswoman Hua Chunying said.

The Chinese consul-general in Gwangju arrived at the rescue scene, Hua added.

If the missing are confirmed dead it would become one of South Korea's worst disasters.

The captain of the ship, Lee Joon-seok, 69, faces a criminal investigation, coast guard officials said, amid unconfirmed reports that he was one of the first to jump to safety from the stricken vessel.

One official said authorities were investigating whether the captain had indeed abandoned the vessel early and one of the charges he faced was violating a law that governs the conduct of shipping crew.

Although the water at the site of the accident is relatively shallow, about 30 meters, it is still dangerous for the divers, experts said.

The government said it was not giving up on the possibility of finding survivors, while the coast guard also turned its attention to the cause of the disaster.

There has been no official explanation for the sinking, although officials denied reports the ship, built in Japan 20 years ago, was sharply off its authorized route.

Although the wider area has rock hazards and shallow waters, they were not in the immediate vicinity of its usual path.

The parents of some students who were still missing, claimed that they received text messages from their children, saying that there were some people still alive. However, South Korea on late Thursday said those messages were fake, Yonhap reported.

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

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