Officials from the Irish government's Marine Department confirmed that a fault in the on-board sewage treatment equipment of the Celtic Pride had led to the deaths.
Passengers had reported a foul smell in the early hours yesterday, and feared an explosion from the build-up of gases.
The victims were last night named as Catherine Tomlins, 15, and her brother James, aged 12, from Glounthane, Co Cork.
After completing a thorough investigation, surveyors specified a number of modifications that would have to be carried out on the ship before it would be permitted to sail again.
The two children had been travelling home on the ferry with the rest of their family, who moved from Britain to Glounthane several years ago. Their parents, Gary and Maeve Tomlins, and their four-year-old sister were in a neighbouring cabin.
The tragedy was discovered when Mrs Tomlins went to their cabin to wake them on arrival at the Ringaskiddy ferry port at Cork at about 8.30am yesterday. She was unable to open the cabin door and sought help from other passengers who forced the door open.
Catherine's body was found on the floor in the cabin, while her brother's body was found near the lavatory. Mr Tomlins said he had noticed a strong 'sewage-type' smell on the ship overnight but had not thought it would cause any harm.
He added that the couple's other daughter had been in the cabin with her brother and sister for a time during the crossing. 'But she could not sleep so my wife and I brought her into our cabin.'
He demanded an inquiry into the tragedy. 'Two fine young people have lost their lives, and it must never happen again,' he said.
J J Keane, a passenger in a nearby cabin, described waking at about 6am yesterday and noticing 'a very strong smell that would really make you feel sick. The only thing I could liken it to was very raw sewage'. Soon after the tragedy Mr Keane heard a crew member warning passengers of gas and urging them to evacuate the area. None of the other passengers were reported to be ill.
Gardai and Irish Marine Department officials investigating the deaths sealed off the cabin, which was in the middle of the ship. It is believed to have been an inner cabin towards the port side, without an outside porthole.
The Celtic Pride is Polish owned and crewed and on lease to the Swansea-Cork Ferry Company.
The ferry first went into service on the Swansea-Cork route in 1987. It has a capacity of 900 passengers and 160 cars. Its scheduled return crossing yesterday morning was cancelled.Reuse content