The Dashun, carrying 312 passengers and crew, caught fire in heavy seas and gale force winds on Wednesday afternoon as the ship headed for the northeastern Port of Dalian in Liaoning province, an official of the Yanda Ferry Company in Yantai told AFP. "Most of the people were frozen to death in the life boats. No one came to rescue them from the time they sent out the distress signal at 4:30 pm Wednesday until Thursday morning," an official who identified himself only as Xu at the ship's owners, the Yanda Ferry Company, told AFP.

"I don't know why the rescuers didn't come. I feel very, very grieved." The ferry was about 10 nautical miles from Yantai when the captain saw high waves and strong winds at 4 pm and asked the company for permission to return to shore, Xu said. Flames werediscovered and the ship sent out a distress signal at around 4:15 pm. The fire later spread to the third deck, causing the ship to begin breaking apart. Xu said the crew of 40 rushed to prepare lifeboats and lifejackets for the passengers. It was not clear how many people were able to get on the lifeboats before the ship capsized.

The crew "remained at their posts" Xu said, but all of them died or were missing. The ministry of transportation's rescue center should have directed rescue operations from the shore, he said. The fire was put out about 9 pm, he added. All contact was lost with the vessel shortly before midnight, said the state Xinhua news agency.

Xu said most of the victims were frozen to death in lifeboats after being pounded by freezing waves throughout the night as no help arrived until Thursday morning. Hospitals in Yantai began receiving victims Thursday morning, with the Yantai Muping District People's Hospital receiving 32 dead and two survivors.