Video footage has emerged from inside the South Korean ferry apparently showing passengers in life jackets as the boat began to sink.
The footage was revealed as the search continues for more than 280 missing passengers, many of whom are thought to be school children.
Six people have been confirmed dead so far - including a male student, a female crew member and another unidentified man.
The South Korean Coastguard says 174 people have been rescued so far.
The ferry, with 462 people and 150 vehicles on board, was sailing to the southern island of Jeju when it sent a distress call at 9am local time (1am UK time) on Wednesday morning as it began listing to one side.
Within two hours it had completely capsized, with only the front part of its hull visible above the water.
The video footage appears to reveal an atmosphere of relative calm before the boat completely capsized, with passengers crouching and sitting in life jackets.
A cause for the tragedy has yet to be established, although one witness told television channel YTN there had been a "loud impact and noise" before it began sinking.
Captain John Noble, a marine salvage expert, told Sky News the most likely explanation was the ferry hit a rock.
He added that passengers would have struggled to get off the ferry quite soon after it began listing.
"Once a ship gets beyond 20 degrees it is impossible for passengers to stand up without holding onto something," he said.
"Once a ship gets to its side you completely lose your orientation. Those poor people would really have relied on rescuers to get them out.
"It's truly remarkable so many rescue crews got there so quickly."
The 338 pupils and teachers on board were from Danwon High School in Ansan, near Seoul. They were reportedly on their way to the Jeju island for a four-day trip.
One student, Lim Hyung-min, told YTN he jumped into the ocean wearing a life jacket with other students and then swam to a rescue boat.
"As the ferry was shaking and tilting, we all tripped and bumped into each another," he said.
He said the ocean was "so cold", adding: "I was hurrying, thinking that I wanted to live."
The 6,825-ton ship left Incheon port, west of Seoul, on Tuesday evening and ran into difficulties about 60 miles (100km) south of the Korean peninsula.
The news agency AP is reporting 55 injuries, including people with burns, hypothermia and fractured bones.
A total of 18 helicopters, 87 rescue boats and 160 divers rushed to the scene, according to AP.
The US Navy has dispatched its amphibious assault ship USS Bonhomme Richard to aid the operation.
Passenger Kim Seong-mok told YTN he was "certain" people were trapped inside as water quickly rushed into the vessel, and the severe tilt of the ferry stopped them getting out.
Some people yelled at those who could not get out, urging them to break windows, he said.
Another passenger said an announcement was made on board telling them to stay put.
"It was fine. Then the ship went 'boom' and there was a noise of cargo falling," said Cha Eun-ok, who was on the deck of the ferry taking photographs at the time.
"The on-board announcement told people to stay put. People who stayed are trapped."
Darkness has now fallen in South Korea and the rescue operation is also being hampered by muddy waters.
"There is so much mud in the sea water and the visibility is very low," Lee Gyeong-Og, the vice minister of security and public administration, told a press briefing in Seoul.
There are concerns storms could affect the operation tomorrow.
Those rescued are being taken to the nearby Jindo Island, where medical teams are wrapping them in blankets, checking for injuries and directing them towards a school gymnasium.
Meanwhile, screams of anguish have been heard as parents of the children on board gather at their high school in Ansan, desperate for news.
An official from the company that owns the ship apologised for the tragedy.
"I would like to say sorry to the passengers including a number of students and their parents, and promise that our company will do its best to minimise loss of life. We are sorry," said Kim Young-boong, from Chunghaejin Marine Corporation.
One of the dead was found inside the sinking ferry, while another died soon after arriving at the Mokpo Hankook hospital on the mainland.