FOUR people are confirmed dead and almost 300 are missing after a ferry carrying mostly students sank off South Korea's southern coast.

Authorities now say four people have died and more than 290 are unaccounted for.

Dozens of boats, helicopters and divers scrambled to rescue passengers who had been on the ferry travelling to the southern island of Jeju.

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One rescued passenger said he believed many people were trapped inside the ferry when it sank.

More than 30 navy and coastguard divers are searching the near-sunken ship for survivors, according to emergency officials.

The vessel sent a distress call after it began listing, according to the Ministry of Security and Public Administration.

The government said about 95 per cent of the ferry, whose passengers included 325 high school students on a trip to the popular tourist island, was submerged.