The impact tore a long gash in the ship's hull which allowed water to flood in. The cruise liner managed to sail to nearby shallow water where she grounded and capsized.

The captain of the stricken cruise liner had sailed too close to the shore forcing all aboard to abandon ship.

The Costa Concordia was carrying around 3200 holidaymakers and 1000 staff.

32 people are feared to have died in tragedy

The confirmed death toll stands at 17 but a further 15 people are still missing.

The search for bodies inside the cruise liner has now been called off due to increasing dangers to the rescue crew.

The search will continue aboard the ship which is above water level, and specialist equipment will be used to scan for bodies on the sea floor.

Survivors offered compensation settlement

Costa Concordia's owner Costa Cruises has offered to pay 11,000 euros (£9200) in compensation to each surviving passenger.

In addition, Costa Cruises will refund the cost of the cruise and travel expenses home. The offer which has been put forward in a bid to prevent legal action applies to all passengers, whether a child or an adult, who suffered no physical injuries. Compensation for physically injured passengers and for families who have lost a loved one will be dealt with separately.

Those passengers accepting the compensation offer will be expected to agree to drop all future litigation against the cruise liner.

Martyn Gwyther, Thompsons Solicitors' National Supervisor for Overseas Accident Claims said: “Incidents such as this disaster are extremely rare today. Mistakes were clearly made and passengers and their families have paid the highest price. Anyone thinking of settling a possible claim should think carefully about the effect of the accident on them and their families. They should seek independent medical and legal advice as it is not uncommon for these type of incidents, even if there is no immediate physical injury to have a long term psychological impact.”