UPDATE 3-Sobbing families of Korea ferry victims sit in road outside presidential palace
By Sohee Kim and James Pearson
SEOUL May 8 (Reuters) - Family members of hundreds of children who drowned when a ferry sank last month sat in the road in a sombre vigil steps from the presidential palace on Friday, demanding those responsible be punished.
President Park Geun-hye did not emerge to meet the 400 relatives who had marched in darkness to her Blue House office but sent two of her top aides to listen to their demands, including the sacking of a state broadcast official for insulting comments.
Clutching memorial portraits of their children and brothers and sisters, the family members were prevented by police from nearing the Blue House, and instead sat in the middle of the road where they sobbed, wailed and shouted in anger.
"We had to watch our kids go from being alive to being killed," said Oh Tae-won, whose teenage daughter was among the victims. "This is a massacre, not an accident, and they are two different things."
The Sewol, overloaded and travelling too fast on a turn, sank off the southwest coast on a routine journey from Incheon on the mainland to the southern holiday island of Jeju, killing hundreds of children and teachers on a high school field trip.
Only 172 people have been rescued of an estimated 476 passengers and crew on board. The confirmed death toll on Friday was 273.
Some of the crew, including the captain, were caught on videotape abandoning ship while the children were told again and again to stay put in their cabins where they awaited further orders. They paid for their obedience with their lives.
Families' grief turned to anger late on Thursday when an executive at a state broadcaster KBS was quoted as comparing the dead and missing to the number of people who die in car accidents in the country.
KBS's head of news operations resigned on Friday to take responsibility. The families outside the Blue House dispersed after the chief executive apologised in person, media said.
Family members spent Thursday night seated in rows on the ground, only light blankets shielding them from the night chill. A mother, overcome with grief, quietly sobbed as she stroked a portrait of her dead son.
They sat in the spring sun on Friday, circled by police who largely outnumbered them, with only occasional angry outbursts aimed at the Blue House.
Park's government has faced continued criticism for its handling of the disaster when a faster initial response could have saved many more lives.
On Friday, investigators began looking into tax evasion charges against the head of the family who owns the operator of the ferry, further widening the scope of the probe into the sinking of the vessel.
Prosecutors are seeking the arrest of members of the family that owns the ferry operator, and may also seek the extradition of a son of the reclusive head of the family from the United States, an official said on Thursday.
Prosecutors on Thursday arrested several officials of the ferry operator and its affiliates, including the chief executive, on charges of negligence causing death and the sinking of a vessel.
All 15 of the surviving crew members, including the 69-year-old captain, have been arrested and face charges of gross negligence amid accusations they abandoned the vessel without performing emergency escape procedures.
The disaster has prompted an outpouring of grief across the country as heartbreaking video and mobile phone footage of the children's last moments emerged.
New video released by families on the march showed students laughing as they tried, and failed, to scramble up a vertical floor.
Earlier footage shows them playing around as the ship started listing, even joking about the sinking of the Titanic, when they had plenty of time to jump overboard.
Only two of the vessel's 46 lifeboats were released.
South Korea, Asia's fourth-largest economy and one of its leading manufacturing and export powerhouses, has developed into one of the world's most technically advanced countries, but faces criticism that regulatory controls have not kept pace.
Nearly 450,000 people have paid tribute to the victims at the altar set up near the school many of the children attended.
But the number of grieving family members keeping vigil on the island of Jindo, where the search operation is centred, has dwindled as more bodies are found each day. (Additional reporting by Ju-min Park in Incheon and Kahyun Yang in Seoul; Editing by Jack Kim and Nick Macfie)