Hundreds of people remain missing after a South Korean ferry carrying 476 passengers slowly sank off the southern coast of the country, amid fears they could be trapped inside the sunken vessel.

The ferry, carry mostly school students, was en route to the southern resort island of Jeju from the port of Incheon. Two people are known to have died and at least 13 others have been injured.

South Korea's government has said 295 people were missing several hours after the ferry sank, raising fears hundreds of children could be trapped inside the vessel.

Dozens of ships and helicopters have been deployed in the rescue operation. Initial reports had said rescuers plucked 368 people from freezing waters as the passengers, mostly school students who jumped out when the vessel started sinking. But due to a counting error this has now been revised to 180.

There were 325 students on board the 6,300-tonne vessel, which capsized fully in about two hours.

The cause of the mishap remains unknown and weather was said to be clear.