The captain of a ferry which sank on Lake Victoria has been arrested as the death toll from the disaster climbed above 130.

Tanzania’s president John Magufuli announced four days of national mourning and ordered the arrests of all those responsible as a criminal investigation began.

Authorities said the ferry was badly overcrowded and capsized shortly before reaching shore. At least 40 people were rescued but scores of bodies have been recovered.

In a televised address, the president said the ferry captain had been detained after leaving the steering to someone who was not properly trained.

The MV Nyerere’s capacity was 101 people but the ferry had been overloaded when it capsized on Thursday afternoon, the government’s Chief Secretary John Kijazi said.

More than 200 people are feared dead based on accounts from fishermen and other witnesses because passengers had been returning from a busy market day, Tanzania Red Cross spokeswoman Godfrida Jola said.

Tanzania Ferry Capsizes
The upturned passenger ferry MV Nyerere floats in the water near Ukara Island in Lake Victoria (AP)

It was obvious that more bodies were trapped in the overturned ferry, the president said. He said even the cargo far exceeded the 25 tons allowed.

Tanzanian ferries often carry hundreds of passengers and are overcrowded, and shifts in weight as people move to disembark can become deadly. Images from the scene showed the ferry’s exposed underside not far from shore.

Bodies were lined up on plastic sheeting as hundreds of people pressed near the water’s edge, watching the search efforts.

Pope Francis, the United Nations secretary-general, Russian President Vladimir Putin and a number of African leaders expressed shock and sorrow.

“His Holiness Pope Francis expresses his heartfelt solidarity with those who mourn the loss of their loved ones and who fear for the lives of those still missing,” the Vatican said.

The MV Nyerere, named after the former president who led the East African nation to independence, was travelling between the islands of Ukara and Ukerewe when it sank.

Worried residents on Friday waited for any word of survivors.

“We try to make calls to friends, relatives,” a local guide, Paschal Phares, said. He recalled how crowded his trip on the ageing ferry had been last month: “Most of us were standing up. It was full.”

Accidents are often reported on the large freshwater lake surrounded by Tanzania, Kenya and Uganda. Some of the deadliest have occurred in Tanzania, where passenger boats are often said to be old and in poor condition.

In 1996, more than 800 people died when passenger and cargo ferry MV Bukoba sank on Lake Victoria.

Nearly 200 people died in 2011 when the MV Spice Islander I sank off Tanzania’s Indian Ocean coast near Zanzibar.