Italian police have arrested a suspected human trafficker believed to be the 'captain' of a migrant boat that sank off the Sicilian Island of Lampedusa, killing more than 200 people.

Kaled Ben Salem, 35, was held at a refugee centre in Lampedusa, where he was staying with other survivors of the shipwreck.

Salem has been charged with multiple manslaughter, aiding and abetting illegal immigration and shipwreck. Police have since moved him to a jail in Agrigento, Sicily.

The Tunisian native from the coastal town of Sfax was identified as the captain by survivors.

They said Salem was one of the heads of a Libyan criminal organisation that organised their ill-fated voyage.

The Tunisian allegedly oversaw their transfer from a warehouse in the Libyan country to a beach on the outskirts of the coastal town of Misurata, where they boarded small vessels that carried them to the fishing boat waiting offshore.

Police said Salem had an assistant who is yet to be identified.

The second suspect has been described by eyewitnesses as a young Tunisian man - underage or in his early twenties - but might have not survived the shipwreck, Ansa news agency reported.

The two had a private cabin on the overcrowded ship and were called "white men" by the migrants due to the lighter colour of their skin.

The boat carried about 500 people, mostly sub-Saharan migrants, including Somalians, Eritreans and Ghanaians.

Authorities believe it sunk after a fire broke out on board. Some survivors said the fire was started by Salem, who set alight a blanket in an attempt to catch the attention of local fishermen off Lampedusa. 235 people have been confirmed dead and scuba divers are still searching for more bodies.

Salem had reportedly been arrested by Italian police on an earlier voyage. In April he steered another migrant boat to Lampedusa, successfully smuggling some 250 people from Libya to the island.

Upon berthing, he was identified as the captain and expelled from Italy, La Repubblica newspaper reported.