Two crew members from a British vessel are being held by police on suspicion of negligence resulting in death, after their ship, the Scot Carrier, collided with a smaller Danish boat in the Baltic Sea, the Swedish Prosecution Authority said on Monday.

The Swedish Coast Guard said it was investigating whether "intoxication" was to blame for the accident.

One crew member of the Danish ship, which capsized after being struck by the larger British freighter in the Baltic Sea, has been found dead.

A second person is still missing after the two vessels collided near the Swedish city of Ystad in foggy conditions on Monday morning, according to Danish authorities.

The Swedish Coast Guard said in a statement: "Additional criminal suspicions have arisen, including gross sea intoxication.

"The Coast Guard is currently taking a number of investigative measures, including various types of coercive measures within the framework of the preliminary investigation."

The Scot Carrier, was "functional" and its crew were safe, authorities said.

According to the Danish Meteorological Institute, the incident took place around 3.30 a.m. local time, with severe fog in the area a possible contributing factor.

The accident happened in Swedish territorial waters and the two ships were sailing in the same direction when they came into contact.

The Swedish Maritime Administration said the Danish vessel was empty of cargo and it was unclear what, if anything, the British ship was carrying.