Italy on Friday mourned the 300 African asylum-seekers feared dead in the worst ever Mediterranean refugee disaster, as the government appealed for Europe to stem the influx of migrants.

As the grim search for bodies off the island of Lampedusa continued, an emotional Pope Francis said Friday should be "a day of tears" for a "savage world" that ignored the plight of refugees.

Emergency services on the remote island -- Italy's southernmost point -- said they had recovered 111 bodies so far and rescued 155 survivors from a boat with an estimated 450 to 500 people on board.

Divers who explored the wreck spoke of seeing dozens of bodies in and around the ship and rescuers said more bodies may have been swept further out to sea by strong currents.

Divers were unable to descend to the wreck on Friday because of choppy conditions but coast guard vessels scoured the surface for more corpses.

"After these deaths, we are expecting something to change. Things cannot stay the same," the mayor of Lampedusa, Giusi Nicolini, told reporters.

"The future of Lampedusa is directly linked to policies on immigration and asylum," she said.

Interior Minister Angelino Alfano appealed for greater European assistance in patrolling Italy's southern maritime border and more action in Africa to stem the flow of perilous refugee crossings.

"This sea is the border between Africa and Europe, not between Africa and Sicily," he said during a visit to the island, adding that he would meet the EU's Home Affairs Commissioner Cecilia Malmstroem in Brussels next week to discuss the issue.

"This is not just an Italian problem," he said.

Alfano also said the EU's Dublin regulation that forces asylum-seekers to remain in the European country where they first arrive "puts too large a burden" on southern European states like Italy.

The badly overcrowded 20-metre (66-foot) vessel caught fire, capsized and sank on Thursday just a few hundred metres from Lampedusa, as its terrified passengers jumped into the sea.

The migrants were Eritreans and Somalis and their boat had departed from the Libyan port of Misrata.

A suspected Tunisian crew member has been detained as prosecutors investigated the tragedy.

Flags flew at half mast across Italy and schools held a minute of silence for the victims while President Giorgio Napolitano has called for the abolition of a law against facilitating illegal immigration that penalises potential rescuers.

Locals on the island, which is closer to North Africa than to Italy and has a population of just 6,000, fought back tears as they spoke of the desperate rush to save drowning immigrants.

"The hardest thing was seeing the bodies of the children. They had no chance," said local doctor Pietro Bartolo, who said in 20 years on the island he had "never seen a human tragedy like this".

Alessandro Marino, a shopkeeper on Lampedusa, spoke of seeing "a nightmarish situation" when he saw the scene from his boat. Rossella Manuci, a waitress who also came to the rescue, said: "For most of the poor souls, it was too late".

The bodies were being kept a hangar at the local airport because there was no more room in the morgue and not enough coffins on the island, which has a population of around 6,000 people.

Coffins arrived by ferry on Friday and the bodies were due to be taken to Sicily for burial.

Lampedusa is a major landing point for asylum-seekers entering the European Union, with many fleeing impoverished and war-torn countries of Africa, the Middle East and Southeast Asia.

Some 25,000 migrants have arrived in Italy so far this year -- more than three times the number from all of last year but still only half the figure for 2011 at the height of the Arab Spring revolts.

Immigration charities estimate between 17,000 and 20,000 migrants have died at sea trying to reach Europe over the past 20 years, often crossing on rickety fishing boats or rubber dinghies.

In the last major disaster in June 2011, between 200 and 270 immigrants fleeing Libya are believed to have died off the coast of Tunisia.

In 1996, 283 migrants from India, Pakistan and Sri Lanka perished trying to reach Sicily.