DHAKA: Rescue workers struggled to find survivors Saturday after at least 28 people were killed when a Bangladesh ferry overloaded with people going home to celebrate a Muslim holiday capsized.

Thousands of frantic relatives crowded the banks of the river Tentulia in the remote southern coastal village of Nazirpura, 250 kilometres (155 miles) from Dhaka, desperate for news of family members.

"We have recovered 28 bodies. We believe dozens more people were trapped under the water and we fear they are dead," district administrator Mejbahul Islam told AFP from Nazirpura, 250 kilometres (155 miles) south of Dhaka.

Fifteen of the bodies were of women and children, Islam said by telephone.

The accident occurred Friday around midnight as the triple deck MV Coco-4, one of the country's largest inland vessels, was approaching the dock on Bhola island in southern Bangladesh.

"The ferry was overcrowded with over 1,000 passengers," local police chief Zakir Hossain told AFP

Most of the passengers managed to swim ashore or were rescued, but others were trapped underwater.

"It's impossible at the moment to say how many are missing," district administrator Islam said.

Some of those rescued were in critical condition in hospital.

The vessel "tilted and part of it sank due to the pressure of the crowd" as it came near the shore, police chief Hossain said.

Divers had rescued more than 100 people from the submerged part of the vessel, managing to prise open lower cabins, Islam said.

Rescue operations were resumed after being suspended for several hours because of fuel leaking from the vessel.

Local member of parliament Abdullah Al Islam said authorities were sending a salvage vessel to bring the boat to shore.

"Until we can lift the sunken side, we can't know how many were trapped inside," he said.

The ferry left Dhaka on Friday afternoon packed with people travelling to their village homes to celebrate the three-day Eid al-Adha festival, the second largest Muslim celebration.

Police said the vessel, which had a capacity of 665 passengers, started listing following a stampede.

"Survivors told us they panicked and rushed to disembark after hearing a loud noise on the bottom deck," said Islam.

The authorities have ordered an investigation into the accident.

Boat and ferry accidents due to lax safety standards and overloading are common in Bangladesh, which is criss-crossed by a network of 230 rivers.

Ahead of every major festival, Bangladesh Inland Water Transport Authority issues warnings to shipowners not to overload ferries.

But owners often ignore the warnings.

Experts also say most of the ferries which ply the rivers are built in local dockyards without proper safety checks.