Hong Kong begins mourning for ferry victims

Flags flew at half mast around Hong Kong on Thursday at the start of three days of mourning for the 38 victims of a ferry collision which sent shockwaves through the Asian financial centre.

Chief executive Leung Chun-ying will lead senior officials in observing three minutes of silence at noon at the harbourside government headquarters, when schools and other public institutions will also fall silent.

Hong Kong's worst maritime accident in 40 years saw a high-speed ferry, the Sea Smooth, collide with a pleasure craft, the Lamma IV, carrying around 120 passengers on a trip to watch national day fireworks on Monday night.

The Lamma IV's left rear was torn open in the impact, throwing scores of passengers into the sea. The vessel's stern was flooded within minutes, trapping passengers in the submerged cabin.

British Prime Minister David Cameron sent his condolences to the victims after the consulate in the former British colony confirmed that an unidentified Briton was among the dead.

US Consul General Stephen Young released a statement expressing his "deepest condolences" for the loss of life.

The European Union foreign policy chief Catherine Ashton also extended her condolences, saying the accident was "a serious blow to a city for which the sea is its soul".

Investigators pored over the wreck of the Lamma IV on Wednesday after it was salvaged and dragged onto a beach on Lamma island, to the southwest of Hong Kong, where the accident happened on a clear night in relatively calm seas.

Authorities have said that in a six-month probe, investigators will try to determine why it sank so quickly, whether there was adequate safety equipment on board and if the captains of the vessels followed the rules of the sea.

Shock and disbelief that such an accident could have happened in one of the world's busiest ports, which prides itself on its state-of-the-art transport infrastructure, was giving way to grief as the traditional mourning period began.

"I never thought such a tragedy would happen here and so many people would die," survivor Ivan Lee, 47, told AFP on Wednesday.

The building contractor was with his wife and two young children on the Lamma IV, which was taking staff and friends of local power company Hong Kong Electric -- owned by Asia's richest man Li Ka-shing -- on a national day cruise.

"In less than a minute, the boat started to list and the water was coming in... as I put the life jacket over my son's head, we were already under water," he said.

"I thought my whole family would die there."

Lee managed to escape out of a window with his son and daughter. His wife also survived.

The Li family has offered HK$200,000 ($25,800) to the next of kin of each of the deceased.

Passengers on both vessels described scenes of panic and chaos after the collision. As the pleasure craft partially sank, the Sea Smooth ferry limped to port on Lamma, taking on water through a gaping hole in its bow.

Police arrested the captains of both vessels on Tuesday along with five crew. All were released on bail and none has spoken publicly about what happened.

Ferry operator Hong Kong and Kowloon Ferry Holdings said its captain was a 20-year veteran.

General manager Nelson Ng, who lost two relatives aboard the Lamma IV, rejected allegations from Hong Kong Electric executives that the ferry abandoned the sinking pleasure craft.

"We stopped at the scene and did not leave immediately, but what actually happened is up to the investigation to determine," he said, pledging the ferry operator's full cooperation.

At least five children were killed in the collision. More than 100 people were injured, including some who remain in critical condition in hospital.

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