Philippines Vice President Noli de Castro said had the ferry disaster task force been told earlier about the toxic cargo, divers would not have been sent to the vessel in search of bodies.

'This should not even be aboard a passenger ship,' he said at a news conference.

The taskforce was told by the Philippines' Fertiliser and Pesticides Authority (FPA) on Thursday that the toxic cargo was bound for a Del Monte plantation in the southern Philippines.

Sulpicio Lines, already under fire for allowing the ferry to sail when a typhoon had hit the archipelago, said it did not know about the cargo.

'We were not aware of any pesticide on board,' said Ryan Go, a company executive.

According to officials, Del Monte wrote to the Fertiliser and Pesticides Authority (FPA) on Tuesday about the shipment.

The FDA did not alert a taskforce dealing with the ferry disaster till Thursday.

The police sealed off the area around the capsized vessel and banned fishing in the waters off Sibuyan island.

'We will be affected badly. This makes us even worse off,' said Juanito Reyes, a local fisherman.

The discovery of the chemical was a grim reminder of how standards are flouted in the Philippines, an archipelago of over 7,000 islands with a woeful track record in maritime safety.

Princess of the Stars ran aground during a typhoon and then overturned in around 15 minutes off the central island of Sibuyan on Saturday with 865 passengers and crew.

The incident is likely to be the Philippines' worst sea accident since the Dona Paz ferry collided with an oil tanker in 1987 killing more than 4,000 people.

Sulpicio Lines, which owns the Princess of the Stars, also owned the Dona Paz.

More Misery

Disaster officials said the removal of the pesticide would only start at the weekend because special protective diving gear needs to be obtained from Singapore.

Extracting the container safely will be difficult.

The stern of the seven-storey ship is resting on the edge of a reef with only the tip of its bow visible from shore.

There is also around 100,000 litres of fuel still on board.

Efforts to retrieve bodies from the ship will be postponed till next week adding to the misery of distraught relatives.

'We will continue to wait,' said Alexander de la Cruz, whose sister and brother-in-law and their three children were on board.

So far, only 56 survivors have been found; either plucked from the water by fishermen or washed up on surrounding islands. Only around a dozen bodies have been removed from the ship.

The overall death toll from Typhoon Fengshen could top 1,300, including over 500 people killed in a torrent of flooding that tore up trees and bridges, destroyed homes and forced over two million people to evacuate. -- REUTERS