The cargo of industrial fuel oil on a tanker that sank in stormy weather in Manila Bay has started to leak in small amounts, the Philippine coast guard said Saturday.

Authorities were scrambling to start a delicate undersea operation to siphon off the highly toxic shipment from the sunken vessel, which has remained intact, to avert a major environmental crisis.

The 65-metre tanker Terra Nova was carrying about 1.4 million litres of industrial fuel oil stored in watertight tanks when it got lashed by huge waves, apparently developed engine trouble, then took on water after leaving Bataan province west of Manila for a domestic trip.

The crew struggled to steer the tanker back to port, but it sank early Thursday. Sixteen crew members were rescued but one drowned, coast guard spokesperson Rear Admiral Armando Balilo said.

Divers have reached the tanker, which the coast guard earlier said is lying at a relatively shallow depth of 34 metres, and saw small amounts of the cargo leaking out of a valve of one of a number of separate compartments, although the tanks were intact.

Oil slick grows to 14 kilometres

An oil slick near the rough seawaters where the tanker sank off Bataan province's Limay town has now lengthened to 12 to 14 kilometres, Balilo said, citing an aerial inspection. But, he added, the slick is not highly viscous and not deeply black in colour, indicating there is still no major leak.

The leaking oil may have come both from the small tank that powered the ship's engine and from the tanker's cargo, he said.

"It's really an oil spill now," Balilo said. "The amount is minimal and manageable and, hopefully, it will stay that way until we can start the siphoning."

The oil spill was being carried by sea currents toward towns in the provinces of Batangas and Cavite, south of Manila, which were advised to prepare to contain any oil that may reach their shores. A town in Bataan province has indefinitely banned fishing in waters that could have been contaminated by the leak, the coast guard said.

The sunken tanker's owner has contracted a private company to siphon the cargo, an operation that could start on Sunday and take a week to complete, Balilo said. Three coast guard ships with personnel and equipment for oil spill containment have been deployed and have started laying floating booms in the affected waters.

Balilo compared the magnitude of the possible oil spill to one caused by the sinking of another Philippine oil tanker, the MT Princess Empress, which was carrying much less fuel oil cargo, in February last year off Oriental Mindoro province, south of Manila.

That spill took about three months to contain, caused massive damage to coral reefs and mangroves in a region known for its rich biodiversity and affected tens of thousands of fishermen and beach resorts.

Manila's shoreline is a major tourism and business hub, where the main seaport, a historic public park, the U.S. Embassy, upscale hotels and restaurants and huge shopping malls are located. Land reclamation projects are also underway in the bay for upscale entertainment and tourism complexes with casinos. For years the bay has been notorious for its pollution but famous for its picturesque sunsets.