17 April 2014 Last updated at 04:11 Distressing footage has emerged, apparently showing passengers waiting to be rescued, as Lucy Williamson reports
Officials say 179 people have been rescued. Most of the passengers on board were students and teachers from the same high school on a field trip.
Emergency teams used floodlights to search for survivors overnight but divers were unable to enter the ship.
At least nine people are confirmed to have died, with dozens more injured.
The vessel was travelling from Incheon Port, in the north-west, to the southern resort island of Jeju.
South Korean TV networks are constantly replaying dramatic footage of the rescue efforts. It shows an armada of small boats motoring right up beside the ferry, which listed heavily on its side before sinking.
What makes this accident even more distressing is the fact that among those on board were high school students on a trip to a holiday island.
Relatives and friends of those on board are posting on social media sites asking for any news or information about loved ones.
South Korea's Yonhap news agency said the nine dead include four 17-year-old students and a 25-year-old teacher as well as a 22-year-old female crew member. Identities of the other three were not immediately known.The latest figures say 475 people were on board with 287 still unaccounted for.
It is not yet clear what caused the ship to list at a severe angle and flip over, leaving only a small part of its hull visible above water.
Rescue efforts are concentrated on the ship's wreckage, which sank in about 30m (98ft) of water. Many passengers are thought to be trapped inside.
Strong currentsOne senior emergency official was quoted as saying it was unlikely the remaining passengers would be found alive.
But the country's Prime Minister, Chung Hong-won, said there was not "a minute or a second to waste" in the search for survivors, urging those involved to do their utmost to save more lives.
He had water thrown at him as he visited angry relatives gathered at the port of Jindo, near to where the ferry capsized.
Officials say the rescue operation involving coastguard, military and commercial vessels has been hampered by poor visibility and strong currents.
"There is so much mud in the sea water and the visibility is very low," said Lee Gyeong-og, vice-minister of security and public administration.
Divers trying to enter the ship overnight were unable to do so because of strong currents.
The US Navy has sent an amphibious assault ship, the USS Bonhomme Richard, to assist with the search and it is standing by to provide support as requested.
Flares light up the early morning sky as teams continue to search the capsized ferry 
Relatives wait anxiously for news of their loved ones at a port in Jindo 
Parents at Danwon high school hold a candle light vigil in Ansan. More than 300 students from the school were on board the ship Rain, strong winds and fog are forecast for Thursday, and may hamper further rescue efforts.
'Shaking and tilting'At least 325 of the passengers on board the ship were students from Danwon high school in Ansan, near the capital, Seoul. The students, aged 16 and 17, were heading on a field trip to Jeju island with about 15 teachers.
The ferry sent a distress call at around 09:00 local time (00:00 GMT) on Wednesday after it began to shake and take on water, about 20km (12 miles) off the island of Byungpoong.
Aerial footage shows frantic efforts to rescue passengers as the ship sank
Military and civilian ships and helicopters have been searching for survivors 
Rescued passengers were taken to the nearby island of Jindo Survivors say they heard a loud thud, before the boat began to shake and tilt.
Some of the passengers managed to jump into the ocean, wearing life jackets and swim to nearby rescue boats and commercial vessels.
One student told local media they were instructed not to move as it was dangerous.
"I am told that my friends and other friends could not escape as the passage was blocked. It seems that there are many students who could not get out as the passage was blocked by water," the unnamed student said.
Continue reading the main story 1970: Sinking of passenger vessel Namyoung leaves 323 dead1993: Sinking of passenger vessel Seohae Ferry leaves 292 dead2007: Sinking of freighter Eastern Bright leaving 14 sailors missing2009: Sinking of cargo ship Orchid Pia after a collision leaves 16 sailors missingSource: Yonhap
Local TV stations broadcast footage of the ferry listing and later sinking, within two hours of sending a distress signal.Images showed rescue teams pulling teenagers from cabin windows, as some of their classmates jumped into the sea.
South Korean President Park Geun-hye has expressed sadness over the incident, saying it was "truly tragic" that students on a field trip were involved in "such an unfortunate accident".
Kim Young-boong, an official from the company which owns the ferry, has apologised.
Survivor: "There was an announcement telling us to sit still, but the ferry was already sinking"As the disaster unfolded on Wednesday, there were conflicting accounts of the number of people rescued. Early reports suggested over 300 people had been plucked to safety but South Korean officials later revised this down.
The vessel - named Sewol - is reported to have a capacity of up to 900 people and is 146m (480ft) long.
Correspondents say this could turn out to be South Korea's biggest maritime disaster for more than 20 years.
Are you in the area? Do you have any information you would like to share? Please send us your comments. You can email us at haveyoursay@bbc.co.uk using the subject line 'South Korea ferry'.
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