YTN television, South Korea's main cable news station, had reported that eight divers were taking it in turns to search the vessel, but the coastguard said that divers had not yet been deployed inside the stricken vessel.
The coastguard also denied television reports that the ship had been fully submerged, over 48 hours after the accident.
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Experts say it is now unlikely that any of the 268 missing passengers, many of them children from a school on the outskirts of the capital Seoul, will be found alive
Theories about the cause of the accident swirled and an official investigation was due to resume with questioning of the captain. The vessel started to sink on Wednesday on a routine trip out of the major port of Incheon to the holiday island of Jeju, 480 km (300 miles) to the south.
Coastguard officials have said the investigation was focused on possible crew negligence, problems with cargo stowage and structural defects of the vessel, although the ship appears to have passed all of its safety and insurance checks.
The captain, Lee Joon-seok, faces criminal investigation, which is standard procedure in South Korea. Relatives of those who died have accused him and some of his crew of being among the first to leave the vessel.
Both 69-year-old Lee and the company that owns the ship have apologized for the loss of life, although neither has admitted responsibility.
Most of those on board were children from a high school in the suburbs of Seoul who were on a field trip to Jeju.
Relatives were in mourning overnight in a hospital in the city of Mokpo, close to the port city of Jindo, which is acting as a rescue center. Some of them spoke bitterly of the captain.
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"How could he tell those young kids to stay there and jump from the sinking ship himself?" said Ham Young-ho, grandfather of 17-year-old Lee Da-woon, one of the dead.
Lee has not made any public statement on whether or why he may have left the vessel before many of the passengers.
Witness accounts say crew members instructed some passengers to remain where they were as the ship listed sharply and then capsized in about two hours 25 km (16 miles) southwest of Jindo, a large South Korean island connected to the mainland.