The head of India’s navy said he was hoping for the best but having to “prepare for the worst” after a huge explosion sunk a submarine with 18 men.

There has been no contact with any possible survivors.

Late on Wednesday, almost 24 hours after the submarine sank, navy divers were still making frantic efforts to try and reach anyone who may have survived the explosion that sparked a massive fire at the naval dockyard in Mumbai. India’s defence minister said there were fatalities but declined to give further details.

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Three officers and fifteen sailors were onboard the Russian-made, diesel-powered INS Sindhurakshak when there were at least two explosions at around 1am. The 16-year-old submarine, which in January had returned from Russia where it had undergone an £51m upgrade and refit, was fully armed with torpedoes and cruise missiles.

Images on Indian television showed a ball of fire above the submarine at the naval dockyards in the south of Mumbai. Around a dozen fire engines were dispatched to the scene to tackle the blaze, which took two hours to put out.

Officials said naval divers had been trying to make contact with possible survivors but that there been no response. For several hours after the explosions the submarine was too hot for the divers to approach. Late on Wednesday afternoon they had managed to enter the first of several hatches.

“I am saddened at the loss of life of naval personnel in the service of the country,” said India’s defence minister, AK Antony, who flew Mumbai. “ It’s a great loss to us... it’s the greatest tragedy of recent times.”

The head of the navy, Admiral Devendra Kumar Joshi, said an investigation had been launched to try and ascertain the cause of the explosions. He said sabotage had not been ruled out though there was nothing to indicate foul play at this stage.

As to possible survivors, he said while indications were “negative” he could not rule out the chance that some onboard had found an air pocket or else breathing apparatus. “While we can hope for the best, we have to prepare for the worst,” he told a press conference.

Three naval personnel who had been on top of the submarine when the blasts happened were taken to the INHS Ashwini naval hospital hospital. Mr Joshi said they had only sustained minor injuries.

In recent years, India has been trying to upgrade its fleet of submarines, part of an overhaul of its armed forces that has been in part pushed by what perceives as a mounting threat from China. The INS Sindhurakshak is one of 10 Kilo-class submarines bought from Russia between 1986 and 2000. It is equipped with a Russian Club-S cruise missile system.

Last year the Indian navy acquired a Nerpa nuclear submarine on a 10-year lease from Russia for around £650m. India also has designed and built its own nuclear submarine, a vessel that could be deployed within two years.

Ajai Shukla, a defence analyst and journalist, said the incident was a significant blow for the navy. He said while the navy had been making good progress in upgrading and modernising, the overhaul of the submarine fleet was going less rapidly. “This is a huge set-back,” he said.

In February 2010, a sailor onboard the INS Sindhurakshak was killed by a fire that broke out in the battery compartment after a leak of hydrogen while it was docked at the Vishakhapatnam naval base. Indian media said today’s incident would represent the worst set-back for India’s navy since the INS Khukri was sunk in 1971 during the Indo-Pakistan war.

The Russian ship repair company which carried out the submarine’s recent upgrade, Zvyozdochka, said the blasts were unrelated to its repair work. The Associated Press press said a statement carried by the Interfax news agency, said: “According to the members of our warrantee group, the vessel was functioning properly and had no technical faults at the time of the incident.”