Dozens of Britons were safely rescued after a luxury cruise liner ran aground and later keeled over off the Italian coast, it was reported.

But three people on board the ship were confirmed dead by the Italian coastguard, and divers were tonight scouring the submerged hull for around 70 people who remain missing.

The Foreign Office said it was unable to verify reports that all 37 British nationals were safe after Costa Cruises announced the 25 passengers and 12 crew members had been accounted for.

The Costa Concordia, which was carrying more than 4,000 passengers, experienced trouble a few hundred metres from the tiny Tuscan holiday island of Giglio on Friday evening after apparently sailing off course.

There was panic as desperate passengers scrambled to evacuate the stricken vessel as it began to take on water and list to the right, with some opting to jump into the sea.

The three dead were said to be two French passengers and one Peruvian crew member.

An Italian coastguard official, Capt Cosimo Nicastro, said rescue divers were still searching the submerged half of a cruise ship for people who may be trapped "in the belly of the ship".

The first sign that something was wrong on the vessel was a power black-out and large 'boom' noise at around 10.30pm on Friday, according to passengers.

The ship then ran aground off Giglio and a massive coastguard rescue operation involving helicopters and rescue boats was immediately launched.

As the sun rose today, the ship could be seen almost completely on its side.

The disaster happened in the centenary year of the Titanic disaster, in which more than 1,500 people died.

A Foreign Office spokesman said: "We are in close contact with the local authorities and are working urgently to identify British nationals involved.

"A consular team from the British Embassy will shortly be in the area to provide consular assistance."

Pictures showed a massive gash in the hull more than 150ft long, with a huge rock embedded in the side of the ship towards the stern.

Calm seas and little wind helped the rescue operation, which is said to have involved five helicopters, from the coastguard, navy and air force.

Survivors far outnumbered Giglio's 1,000 or so residents, and island Mayor Sergio Ortelli asked for "anyone with a roof" to open their homes to shelter the evacuees.

The evacuees took refuge in schools, hotels, and a church on the tiny island, before they were taken by local ferries to Port Santo Stefano on the mainland.

The alarm was raised about three hours after the Concordia had begun its voyage from the port of Civitavecchia, en route to its first port of call, Savona, in north-western Italy.

According to Costa, around 1,000 Italians, 500 Germans and 160 French nationals were onboard, with around 1,000 crew members.

A statement said: "Our first thoughts go to the victims and we would like to express our condolences and our closeness to their families and friends."

Malcolm Latarche, editor of global shipping magazine IHS Fairplay Solutions, said the reports of a power black-out and loud 'boom' could indicate the ship suffered an engine room explosion.

The expert said a power surge or "harmonic interference" could have caused a malfunction in the generators feeding the ship's six diesel electric engines which was not overcome by back-up systems.

This would have caused the ship to lose navigational power and steering control and veer off course, he said.

"I would say power failure caused by harmonic interference and then it can't propel straight or navigate and it hit rocks," said Mr Latarche.

The parents of two British dancers, who were working on the ship at the time of the accident, spoke about their daughters' ordeals as they raced to flee the vessel.

Sandra Cook, whose daughter Kirsty had to get down a rope ladder on to a boat to escape the listing Concordia, told BBC News: "I asked whether she had anything, she'd lost everything, and she said that she was lucky to be alive and very thankful."

Another dancer, 22-year-old Rose Metcalf, was performing on the ship when the incident happened and was one of the last to be winched to safety by a helicopter, her father Philip said.

Mr Metcalf, who lives near Witchampton, Dorset, also told BBC News: "The ship rolled over on its side so they had to get a fire hose which they strung between the railings to stop them falling overboard.

"She thought she'd have to make a jump for it as it was dark and cold, like the sinking of the Titanic, but the helicopter then winched her off."

Fabio Costa, who worked in a shop on the ship, said there was a state of panic, and a number of people were jumping into the sea to swim ashore.

He told the news channel: "We were all working and all of a sudden we felt the boat hitting something and everything just started to fall, all the glasses broke and everybody started to panic and run."

Mr Costa said that once the emergency alarm was set off people started to panic and push each other in a bid to get into lifeboats.

The worker said it took hours for people to get off the ship because it was listing so much.

"It was easier for people to jump into the sea because we were on the same level as that water so some people pretty much just decided to swim as they were not able to get on the lifeboats."

The Foreign Office gave contact details for the British Embassy in Rome for concerned friends and relatives.

The telephone number is (+39) 06 4220 0001, and the Foreign Office in London can be contacted on 0207 008 1500.

Christopher Prentice, the British Ambassador to Italy, told Sky News at the scene: "We're making good progress on ascertaining and confirming the whereabouts and welfare of the British citizens who we believe to have been involved."

Asked if he could confirm the reports that nobody from Britain was injured or dead, he said: "We are going to be quite cautious about judgments and what we say in public until we really are absolutely certain of the facts.

"We're making good progress on matching names to lists, and confirming whereabouts. We have made contact with many of the passengers."

The Ambassador said he had spoken to some of the Britons who had been evacuated, and they told him they left the ship in an "orderly fashion", with "no tales of chaos".