Forty people from the stricken cruise liner Costa Concordia were still missing tonight as it was reported that the ship's captain and first officer were being questioned by Italian prosecutors on suspicion of manslaughter.
The country's state television claimed Master Francesco Schettino and the officer were being quizzed over the events that led to at least three deaths among passengers and crew after the Italian-owned liner listed and keeled over a few hundred metres from the tiny Tuscan holiday island of Giglio on Friday evening after apparently sailing off course.
Unconfirmed reports indicated they were being held on suspicion of "abandoning ship" and "multiple manslaughter".
Late on Saturday, divers managed to rescue two people from within the ship's hull. According to Italian news agency Ansa, rescuers found a man and a woman stranded in a cabin two decks down. Two passengers and a crew member had already been confirmed dead.
The incident happened in the centenary year of the Titanic disaster, in which more than 1,500 people died when the luxury liner struck an iceberg on its maiden voyage.
Despite the panic among passengers and crew as the Costa Concordia began to list, the vast majority of more than 4,200 people on board made it to safety as a massive rescue operation swung into action.
Initial estimates had put the number of missing at 70 but as rescue operations continued tonight that figure fell to 40.
British consular staff were on hand to help the 37 Britons aboard the Concordia - 25 passengers and 12 crew members.
Costa Cruises said all were accounted for but the Foreign Office was unable to confirm this.
It was thought some of the Britons had headed to Rome and consular staff were working to secure emergency travel documents for them to fly home after their passports were lost.
Tonight, divers continued to scour the submerged hull for the missing.
It is not known yet what caused the liner to crash into rocks ripping a massive gash in its hull.
Panic broke out as desperate passengers scrambled to evacuate the stricken vessel as it began to take on water and list to the right, with some opting to jump into the sea.
An Italian coastguard official, Capt Cosimo Nicastro, said rescue divers were still searching the submerged half of a cruise ship for people who may be trapped "in the belly of the ship".
The first sign that something was wrong on the vessel was a power black-out and large "boom" noise at around 10.30pm on Friday, according to passengers.
The ship then ran aground off Giglio and a massive coastguard rescue operation involving helicopters and rescue boats was immediately launched.
A Foreign Office spokesman said: "We are in close contact with the local authorities and are working urgently to identify British nationals involved."
Calm seas and little wind helped the rescue operation, involving helicopters, from the coastguard, navy and air force.
Survivors far outnumbered Giglio's 1,000 or so residents, and island Mayor Sergio Ortelli asked for "anyone with a roof" to open their homes to shelter the evacuees.
The survivors took refuge in schools, hotels, and a church on the tiny island, before they were taken by local ferries to Port Santo Stefano on the mainland.
The alarm was raised about three hours after the Concordia had begun its voyage from the port of Civitavecchia, en route to its first port of call, Savona, in north-western Italy.
A statement said: "Our first thoughts go to the victims and we would like to express our condolences and our closeness to their families and friends."
Malcolm Latarche, editor of global shipping magazine IHS Fairplay Solutions, said the reports of a power black-out and loud "boom" could indicate the ship suffered an engine room explosion.
The expert said a power surge or "harmonic interference" could have caused a malfunction in the generators feeding the ship's six diesel electric engines which was not overcome by back-up systems.
This would have caused the ship to lose navigational power and steering control and veer off course, he said.
"I would say power failure caused by harmonic interference and then it can't propel straight or navigate and it hit rocks," said Mr Latarche.
The parents of two British dancers, who were working on the ship at the time of the accident, spoke about their daughters' ordeals as they raced to flee the vessel.
Sandra Cook, whose daughter Kirsty had to get down a rope ladder on to a boat to escape the listing Concordia, told BBC News: "I asked whether she had anything, she'd lost everything, and she said that she was lucky to be alive and very thankful."
Another dancer, 22-year-old Rose Metcalf, was performing on the ship when the incident happened and was one of the last to be winched to safety by a helicopter, her father Philip said.
Mr Metcalf, who lives near Witchampton, Dorset, also told the channel: "The ship rolled over on its side so they had to get a fire hose which they strung between the railings to stop them falling overboard.
"She thought she'd have to make a jump for it as it was dark and cold, like the sinking of the Titanic, but the helicopter then winched her off."
Fabio Costa, who worked in a shop on the ship, said there was a state of panic, and a number of people were jumping into the sea to swim ashore.
He added that once the emergency alarm was set off people started to panic and push each other in a bid to get into lifeboats.
Christopher Prentice, the British Ambassador to Italy, told Sky News at the scene: "We're making good progress on ascertaining and confirming the whereabouts and welfare of the British citizens who we believe to have been involved."
Asked if he could confirm the reports that nobody from Britain was injured or dead, he said: "We are going to be quite cautious about judgments and what we say in public until we really are absolutely certain of the facts.
"We're making good progress on matching names to lists, and confirming whereabouts. We have made contact with many of the passengers."
The Ambassador said he had spoken to some of the Britons who had been evacuated, and they told him they left the ship in an "orderly fashion", with "no tales of chaos".
Gianni Onorato, the President of Costa Cruises, said: "I want to express our deep sorrow for this terrible tragedy that devastates us."
The Foreign Office gave contact details for the British Embassy in Rome for concerned friends and relatives.
The telephone number is (+39) 06 4220 0001, and the Foreign Office in London can be contacted on 0207 008 1500.