IONA was an island in mourning last night after one man died and three others were feared drowned.

Their 14ft wood dinghy, outboard powered, capsized as they returned to the island from a dance on Mull.

A fifth man managed to swim ashore. He staggered two miles across the Mull hills to raise the alarm.

Former Labour leader John Smith is buried on Iona and Mr Gordon Grant, 33, the man who survived, is understood to be a close friend of his youngest daughter, Catherine, who travelled to the area yesterday.

Rescuers found the dinghy and some clothing, but there has been no further sign of the three men.

A coastguard spokesman said that unless the three men had managed to get ashore and take shelter, hope was fast disappearing. Oban Coastguard said the search would restart at 9am today.

The men, aged between 19 and 24, all came from Iona. They were experienced boatmen.

The dinghy capsized early yesterday soon after setting out from Fionnphort on Mull. The boat is believed to have been swamped in the half-mile wide Sound of Iona.

Conditions were choppy with a Force Six westerly. ''But they are all families of fishermen, and they have done this journey so many times,'' said the coastguard spokesman.

Police named the man whose body was recovered as Mr Robert Hay, 23, of Cnoc Oran. The three missing men are Mr Logie MacFadyen, 24, of Laggan Dorain; Mr Alisdair Dougal, 19, of Primrose Cottage; and Mr David Kirkpatrick, 23, of Iona Cottage, all Iona.

The survivor, Mr Grant, known locally as Pal, is from Achavaich, Iona. He was treated for hypothermia at Lorne and District General Hospital, Oban, where a spokesman said one of Mr Smith's daughters had visited him. Police said: ''He is very, very badly shaken but has only a slight facial injury. He seems to be in reasonable condition.''

Mr Grant's father, an Iona businessman, who owns a pub, restaurant, and other property on the island, said yesterday: ''We are absolutely devastated.'' His wife, Helen, said: ''This is a desperate thing to have happened in a small community like this. We are so short of good young people.'' About 100 people live on Iona.

Baroness Smith said last night her family had been in telephone contact with the island yesterday, adding: ''We are just waiting for news. It is ghastly. I know the people involved, and we are desperately sad.''

The Rev Ron Ferguson, leader of the Iona Community from 1980-88 and now a columnist for The Herald, said last night: ''I knew them all. The severity of that blow to the whole community is awful. They were four young men, and it is a terrible loss.''

Iona farmer John MacInnes, 55, said: ''They had made this journey frequently, often in the dark, on social as well as fishing business.

''It is without doubt the worst tragedy to affect the island in the 50-odd years I have lived here. Losing up-and-coming young people is a great blow to communities such as ours.''

The five men had been at a dinner dance where a Glasgow-based Irish folk group, Crooked Reel, was playing.

The event was held at the Argyll Arms in Bunessan. Proprietor Duncan Macleod said the news had devastated people on Iona and Mull.

The five men arrived after the meal, in time for the music. ''They would then get a lift back to Fionnphort and take the boat back,'' he said. ''One of the lads wasn't drinking at all, and some of the others were going fishing today. I certainly would not say they were drunk when they left.''

q Rescue teams looking for a 28-year-old fisherman shipwrecked off the west coast of Lewis were stood down yesterday after a third day's searching found no trace of the man. Donald Morrison disappeared after the Donna Anna fishing boat capsized in gale force winds on Friday afternoon. A fellow crew-member managed to swim ashore.