UPDATE 3-At least 25 dead after Hong Kong ferry sinks

(Adds new death toll of 25, details)

By Tan Ee Lyn

HONG KONG, Oct 2 (Reuters) - At least 25 people died after a Hong Kong ferry packed with more than 120 people collided with another ferry and sank near Lamma island on Monday night in one of the city's worst maritime accidents.

Low visibility hampered rescue efforts, with many passengers trapped in the flooded upturned ferry before it sank, said survivors.

Nine people suffered serious injuries or remain in a critical condition, the government said in a statement.

The accident occurred on Monday night in the waters off Lamma, an island south of Hong Kong popular with tourists and expatriates.

A ferry belonging to the Hong Kong Electric Company was heading out for an evening cruise to watch fireworks when it collided with another ferry heading for Lamma.

"Our ferry left Lamma island at 8.15 pm to watch the fireworks display out at sea, but within a few minutes, a tugboat (ferry) smashed into our vessel," Yuen Sui-see, operations director for the company, told reporters.

Television pictures showed the red and blue bow of the Hong Kong Electric Company ferry pointing skywards, surrounded by rescue vessels as government helicopters with search lights circled overhead.

"Within 10 minutes, the ship had sunk. We had to wait at least 20 minutes before we were rescued," said on male survivor, wrapped in a blanket on the shore."

Other survivors said the ship swiftly flooded, trapping many people underwater. Passengers had little time to put on life jackets and some had to break windows to swim to the surface.

"We thought we were going to die. Everyone was trapped inside," said another middle aged woman.

The other passenger ferry, owned by Hong Kong and Kowloon Ferry Holdings, made it safely to the pier on Lamma island with a badly damaged bow after the collision, though several of its passengers and crew were taken to hospital with injuries.

The accident occurred over a long holiday weekend in Hong Kong, which is celebrating the mid-autumn festival and China's National Day on Oct. 1.

Thousands of Hong Kong residents live on outlying islands such as Lamma, which lies about three km (two miles) southwest of Hong Kong island.

Hong Kong is one of the world's busiest shipping channels, although serious accidents are rare. Investigations are continuing into the accident.

(Reporting by Tan Ee Lyn, Donny Kwok, Stefanie McIntyre and James Pomfret; Editing by Anne Marie Roantree and Robert Woodward and Michael Perry)

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