So far, 111 bodies have been recovered and 155 people were rescued.
A fisherman who was one of the first on the scene accused the coastguard of wasting time by filming footage of rescue efforts. Concerns have also been raised in the wake of the disaster that strict Italian laws which make immigration a crime may also have hampered the rescue.
"They refused to take on board some people we'd already saved because they said protocol forbade it," the fisherman, Vito Fiorini, claimed.
A local newspaper report claimed two boats belonging to Italy's Financial Guard, which carries out a range of police and rescue duties, had remained in port.
However, the coastguard said in a statement: "After we received the alarm by radio at 07:00 we immediately intervened with our boats, arriving at the site of the shipwreck at 07:20."
The search for the missing was yesterday called off for a second day because of bad weather. Police spokesman Leonardo Ricci said choppy seas had prevented divers from reaching the wreck, which is now resting on the seabed.
A delegation of politicians and officials yesterday highlighted the plight of the survivors, saying they are living in terrible conditions and face criminal prosecution.
Lampedusa's immigration centre, which is equipped to house 250 people, is now packed with more than 1000.
After visiting the centre, Rosario Crocetta, Sicily's regional governor, said: "We have the duty to tell the Italian government and the EU that their structures and policies are not only inadequate, but they're criminal."
Gea Planeta Schiro, with the Civic Choice party, said: "The overcrowding is inhuman. More than 100 woman are using one bathroom, and they have no soap to wash their clothes."
The lawmakers said they spoke to a group of the survivors, and were told that each migrant paid thousands of dollars to smugglers first to cross the Sahara desert, and then to buy passage across the Mediterranean. They could be prosecuted, fined €5,000 and sent home if they are not given political asylum.
The 20m boat was carrying around 500 people - mostly from Eritrea and Somalia - when it capsized on Thursday.
According to survivors, the vessel began taking on water when its motor stopped working as it neared Lampedusa. Some of those on board then reportedly set fire to a piece of material to try to attract the attention of passing ships. However, the fire spread, triggering a panicked rush to one side of the vessel, causing it to capsize.
The skipper, a 35-year-old Tunisian, was arrested. It has emerged that he was deported from Italy in April.
Prime Minister Enrico Letta's centre-left Democratic Party has called for an urgent meeting of the European Council to agree on setting up special "humanitarian corridors" to provide protection for migrant boats.