The ship, Dashun was carrying 336 people, including 295 passengers and 41 crew along the heavily-used shipping route from Yantai to the northeastern port of Dalian when the accident occurred.

Hundreds were drowned when the ship caught fire and broke apart in rough sea in the Shandong province. Only 22 people are known to have survived, the China daily reported.

The cause of the fire is still being investigated although a crew member was quoted by state television as saying that the the fire could have started when the ship's rolling caused oil tanks kept in the lower decks to collide with each other.

Although there is little hope of finding any more survivors after temperatures in Yantai dropped to minus four degrees Celsius, relief work is continuing with more than 5,000 armypersonnel and civilians being mobilised by the provincial government, Xinhua news agency reported.

Relief workers are combing a 28-mile stretch of coastline where a number of bodies were found washed up while a helicopter is scouring the sea for bodies and debris. Near-freezing conditions, heavy snow and high-speed gales are impairing visibility and hampering rescue work.

Dashun sent out distress signals around 4:30 pm (8:30 GMT) on Wednesday when it caught fire. By 5:10 pm, as darkness fell, a rescue boat from Yantai arrived at the scene to find Dashun in flames but rough seas prevented them getting closer than 10 metres (yards) to the stricken vessel. "We waited for three hours to try to get close to the boat, but the waves were too big and we could never get close," a rescuer was quoted by the Beijing Youth Daily as saying. "We threw ropes but the other side couldn't get them."

Dashun went down at 11:45 pm, the report said.