A British ship did not notice it had collided with a Danish freighter in the Baltic sea causing the vessel to capsize leaving one person dead and another missing, according to Swedish media reports.

       The ‘Scot Carrier’ collided with Danish boat, ‘Karin Hoej’, off the southern Swedish coast on Monday and police said two people - a British and a Croatian citizen - have been arrested.

       The British shipping company, Scotline Marine Holdings Limited, said the onboard crew were tested for drugs and alcohol after the collision, to which two exceeded the limit. It is unclear whether they were the same crew members who are under arrest.

       Reports also say the ‘Scot Carrier’ only stopped once it was ordered back by authorities.

       The collision happened at around 3.30am local time (2.30am GMT) in foggy weather conditions and Swedish authorities carried out a major search where one body was found aboard the capsized Danish vessel.

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       Another ‘Karin Hoej’ crewmember is still missing.

       Local rescue service operator, Johan Nilsson, told Swedish media: “There are marks showing that the larger boat ran into the smaller one, which... capsized immediately."

       On Monday, Swedish prosecutors began a preliminary investigation into potential charges of negligence and "gross sea drunkenness”.

       They said the cause of the collision remains unclear.