The captain of a smuggler ship that capsized off Libya's coast killing up to 950 people made a hasty manoeuvre that resulted in what has been described as the Mediterranean's worst migrant tragedy, Italian prosecutors alleged.

Survivors told investigating authorities their vessel sank after colliding with the King Jacob, a Portuguese-flagged container carrier, which had been dispatched by Italy's Coast Guard to help the migrant boat.

Prosecutors in the Sicilian city of Catania claimed evidence suggests the suspected people trafficker steered his ship towards the approaching rescue vessel and then moved away from the helm to hide himself among the asylum seekers. Doing so, he lost full control of the boat, which eventually crashed into the King Jacob.

According to an earlier reconstruction, the 20m (66ft) vessel overturned because migrants rushed to one side upon seeing an approaching container ship. Investigating authorities told Ansa news agency they now believe both events concurred in causing the incident.

The smuggler ship's captain, named as 27-year-old Tunisian national Ali Malek and a Syrian crew member identified as Mahmud Bikhit, 25, have been arrested.

The pair have been charged with people trafficking and reckless multiple homicide in relation to the disaster.

Only 27 people, including would-be-refugees from Mali, Gambia, Senegal, Somalia, Eritrea and Bangladesh, survived the sea disaster.

They are among the more than 200,000 asylum seekers who successfully reached Europe southern shores over the past 15 months.

Another 5,000 people are believed to have died trying, of which 1,700 perished in the first four months of 2015 only.

In March, the European Union's border agency chief warned up to one million migrants are expected to attempt crossing the Mediterranean from Libya before the end of 2015.

Meanwhile, the Italian Coast Guard said operations were under way to bring to safety more migrant boats spotted near the southern region of Calabria.