Officials said 225 bodies had been recovered from the wreckage in West Bengal, eastern India, but at least 50 more bodies were visible and the death toll was likely to rise.
Many dead and injured were still believed to be trapped in the debris of the 13 carriages and two engines, more than 16 hours after the accident.
As the death toll rose throughout the day, it appeared the crash could rival the country's - and the world's - worst rail tragedy. In June 1981 more than 800 people died when a cyclone blew their train off its tracks and into a river in the northern state of Bihar.
Despite earlier suspicions of a terrorist attack, yesterday's accident was blamed on signal failure, which a senior railway police official said may have been compounded by the negligence of the trains' crews. India's railway minister, Nitish Kumar, and West Bengal's municipal affairs minister, Ashok Bhattcharya, travelled to the area to oversee the rescue operation, which went into full swing at first light.
The Bramahputra Mail bound for New Delhi collided with the Awadh Assam Express heading for Guwahati, Assam, just before 2am as most of the passengers slept. A signal failure between the towns of Kishanganj and Islampur caused both trains to end up on the same track, probably as they changed lines in Gaisal.
Six carriages of one train tore into seven of the other, trapping passengers, and leaving a trail of broken glass, suitcases, shoes and bedrolls. Local residents rushed to the scene and began rescue operations long before the emergency services arrived. The dead were covered in white sheets and laid beside the tracks.
Doctors and 25 local medical students who had been working flat out since 4am said they feared hundreds more passengers would be found in second- class carriages, which are often crammed with more than 70 people each.
At Islampur regional hospital, Dr D K Kundu said he had 225 patients, the vast majority with multiple fractures and head injuries. Another 125 had been referred to a medical college in Siliguri because they were in a serious condition.
Mohammed Rais, one of the injured, was trapped for two hours with blood pouring from his head. He said he used his shirt as a bandage while waiting to be rescued. "I am very lucky to be alive," he said.
The force of the collision left little evidence of at least four of the coaches which were completely flattened.
At first the noise of the crash led police to believe that it had been caused by a terrorist explosion on one train forcing its derailment into the path of the other oncoming train. However, the Bramahputra Mail was ferrying explosives, troops and military equipment. A fire caused by the explosives may have killed many of the victims. Army personnel were taking the wounded soldiers and paramilitaries to their own hospitals.
A special train was leaving Guwahati last night to take relatives of victims to identify bodies at the crash site.
Jyoti Basu, the long-serving chief minister of West Bengal, sympathised with those who had lost loved-ones in the tragedy, but warned that the number of victims could rise.
"This is one of the worst train accidents and the death toll is likely to be much higher," he said.
The Indian President Kocheril Raman Narayanan said the accident "highlights the crying need to improve rail safety measures for the benefit of the travelling public".
Every year in India there are 300 minor and major accidents on the rail network, the largest in the world. More than 4,000 trains carry 13 million people daily. Official inquiries are always conducted into the causes of India's many rail accidents, but the recommendations often become mired in bureaucracy.
Another factor in the country's poor rail safety record is increasing congestion. As many as 160 trains each day run on lines designed for just 60 because railway ministers demand increased services for political reasons.Reuse content