A cargo ship that sunk with eight crew on board has been located on the seabed.

A major search effort was mounted on Saturday after the upturned hull of the Cypriot-registered Cemfjord was spotted in the waters of the Pentland Firth by a passing ferry. The search was suspended just after 4pm yesterday after no trace was found of the crew members.

Today, a sonar ship travelled to the area to search for the sunken ship and assess how it is lying. Pharos, which is operated by the Northern Lighthouse Board, located the Cemfjord close to where the upturned hull was last seen.

A liferaft from the cargo ship has been discovered drifting in the Pentland Firth, but there were no signs that it had been used, the coastguard said.

Tony Redding, spokesman for German shipping company Brise of Hamburg, which manages the Cemfjord, said it is believed that the ship is upside down on the seabed and further sonar searches will be carried out tomorrow to work on how it can be recovered.

Severe weather is likely to have played a part in the capsize and sinking of the ship, Mr Redding added.

"It was a violent storm and it seems likely that the weather would have been a factor but, until we have some better idea of what happened, I can't say how much of a factor," he said.

"It must have played some part in what happened but it will take some time to put the picture together because, sadly, we're not in a position to interview the crew and the vessel is submerged in around 68 metres (223ft) of water.

"We look for abnormalities and at the moment we don't have any apart from the fact that there was severe weather at the time."

The Marine Accident Investigation Branch (MAIB) is investigating the incident.

The company last heard from the vessel at lunchtime on Friday and there was no distress call.

The crew on the NorthLink ferry Hrossey alerted the coastguard after spotting its upturned hull around 10 miles east of the Pentland Skerries, about 15 miles from Wick, at around 2.30pm on Saturday.

The families of the missing crew, seven Poles and one Filipino, have been notified.

The 272ft bulk cement carrier had been bound for Runcorn, Cheshire, on the west coast of the UK.

It has emerged that the Cemfjord was involved in an incident last July when it was grounded off Denmark.

The Russian captain was found to have excessive levels of alcohol in his blood and was dismissed. The company said no one was injured and there was no pollution.