A diplomatic row has blown up after the crew of an Italian cargo ship killed two Indian fishermen believed to be pirates.

Sources in the Indian navy said that the ships were in international waters off the coast of southern India and the Italian vessel was identified as Enrica Lexie. Its captain and crew have been questioned by the Indian coastguard.

The cargo ship's owners have apologised for the incident but families of the fishermen say that the attack was unprovoked. Nine other fishermen onboard survived.

"We have not yet formally detained the ship. This will done only if there is such a need after preliminary questioning of the crew," a coastguard official told the Times of India.

Local reports claimed the Italian ship had violated maritime protocol but the Italian embassy denied the allegations and stuck to the original claim that the fishermen were pirates.

"After repeated warnings and after ascertaining from binoculars that the pirates were armed, warning shots were fired and the pirates withdrew,'' the embassy said.

The state government of Kerala, from where the victims came from, said that no evidence had been found that the fishermen were armed.

"That is a completely false statement; there were no weapons in the boat," PG Thomas, an Indian local official, said.