The captain of a cruise ship has been taken into custody after a fatal collision with a tour boat on the River Danube in the heart of Budapest.

Hungarian rescue workers have been scouring the river for 21 people missing after the sightseeing boat carrying South Korean tourists sank in a matter of seconds after colliding with the larger cruise ship during an evening downpour.

Seven people are confirmed dead and seven were rescued, all of them South Koreans.

Hungarian Police said the 64-year-old Ukrainian cruise ship captain is suspected of endangering water transport leading to a deadly mass accident.
 

Soldiers take part in the search operationSoldiers take part in the search operation (Zoltan Mathe/MTI/AP)

In line with Hungarian laws, the suspect was identified only as Yuriy C, referencing his first name and the initial letter of his last name.

Police say they detained the Odessa resident after questioning him and have proposed his arrest.

The South Korea-based Very Good Tour agency, which organised the trip, said the boat - a 70-year-old vessel built in the former Soviet Union - had been on its way back after an hour-long night tour on Wednesday evening when the accident happened.

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A rescue boat searches for survivors on the River Danube in BudapestA rescue boat searches for survivors (Laszlo Balogh/AP)

Nineteen South Koreans and two Hungarian crew members - the captain and his assistant - are missing.

The tour party had consisted of 30 tourists, two guides and a photographer on a package tour of Europe.

Pal Gyorfi, spokesman for the National Ambulance Service, said those rescued were in hospital in a stable condition.

The sunken boat was located early on Thursday near the Margit Bridge, not far from the neo-Gothic parliament building on the riverbank.

Rescue staff take part in the search operation at Margaret Bridge on the River Danube in BudapestRescue staff take part in the search operation on the River Danube (Zoltan Mathe/MTI via AP)
The Viking Sigyn hotel ship is moored following a collision with a sightseeing boat in Budapest, HungaryThe Viking Sigyn hotel ship is moored following the collision (Laszlo Balogh/AP)

Video displayed by Hungarian police showed the sightseeing boat, identified as the Hableany (Mermaid), travelling closely side by side and in the same direction as the Viking cruise ship as they approached the bridge on Wednesday night.

The Hableany then appeared to steer slightly to its left, into the path of the cruise ship, which continued to sail on at the same speed.

The two collided and the sightseeing boat was then seen tipping on its side between the bridge's two supports.

"As the Viking comes into contact with (the Hableany), it overturns it and in about seven seconds, as it turns on its side, it sinks," Police Colonel Adrian Pal said.

Mr Pal said it is unclear what caused the Hableany to steer into the path of the Viking.

He said several people aboard the Hableany fell into the water after the collision.

The South Korean government said none of those on board was wearing a life jacket.

Police said rescue operations were hampered by the rain and the fast flow of the rising Danube.

The search for the 21 missing extended far downstream, even into Serbia, where the Danube goes after leaving Hungary.

The river, which is 450 metres wide at the point of the accident, was fast-flowing and rising as heavy rain continued in the city.

Water temperatures were about 10C to 12C (50F-53F).

Hajoregiszter.hu, a local ship-tracking website, lists the Hableany as having been built in 1949 in what was then the Soviet Union.

CCTV footage recorded on Wednesday night showed that the river was busy with boats of different sizes travelling in both directions.

Budapest has enjoyed a boom in overseas tourism in recent years.

Long-haul flights from as far away as Dubai and Beijing increasingly fly visitors from Asia and the Middle East to the Hungarian capital, a relatively affordable but history-rich European destination.

Earlier, news website Index.hu said one of those rescued was found near the Petofi Bridge, which is about three kilometres (two miles) south of parliament.
Dozens of rescue personnel, including from the military and divers, were involved in the search.

Authorities said both vessels' captains are experienced, with many years of service with their companies.

South Korean President Moon Jae-in instructed officials to employ "all available resources" to support the rescue efforts in Hungary.

A team of South Korean officials left for Hungary on Thursday to assist with the rescue operations and support passengers and their families.

The ministry said the Seoul government will closely co-operate with Hungarian officials so that the rescue efforts can proceed swiftly and effectively.

The Very Good Tour agency said the tourists left South Korea on May 25 and were supposed to return on June 1.

Most of them were family groups and they included a six-year-old girl.

Senior agency official Lee Sang-moo disclosed the identities of the seven rescued South Koreans - six women and one man, aged between 31 and 66.

The Hableany is described on the sightseeing company's website as "one of the smallest members of the fleet".

It has two decks and a capacity for 60 people, or 45 for sightseeing cruises.