Rescuers and families searched through mangled train carriages on Sunday for more victims of India's worst rail crash in more than two decades with signal failure emerging as the likely cause.

At least 288 people were killed on Friday when a passenger train went off the tracks and hit another one near the district of Balasore in the eastern state of Odisha.

Five more bodies were brought to a school being used as a mortuary near the scene of the accident early on Sunday.

"We do not know how many more bodies will come," a health worker said.

Indian Railways says it transports more than 13 million people every day. But the state-run monopoly has had a patchy safety record because of ageing infrastructure.

Prime Minister Narendra Modi, who faces an election due next year, visited the scene on Saturday to talk to rescue workers, inspect the wreckage and meet some of the nearly 1,200 injured.

The South Eastern Railway has said a preliminary report indicated that the accident was the result of signal failure.

Workers with heavy machinery were clearing the damaged track, wrecked trains and electric cables, as distraught relatives looked on.

"We were called by the police and asked to come," said Baisakhi Dhar from West Bengal state, searching for her husband Nikhil Dhar.

She said her husband's luggage and mobile had been found but had no information on his whereabouts.

More than a 1,000 people are involved in the rescue, the Railway Ministry said on Twitter.

"The target is by Wednesday morning the entire restoration work is complete and tracks should be working," said Railway Minister Ashwini Vaishnaw.

At a business centre where bodies are taken for identification, dozens of relatives waited, many weeping and clutching identification cards and pictures of missing loved-ones.

Families of the dead will get 1 million rupees ($12,000) in compensation, while the seriously injured will get 200,000 rupees, with 50,000 rupees for minor injuries, Vaishnaw said on Saturday.

U.S. President Joe Biden, Canadian Prime Minister Justin Trudeau, British Prime Minister Rishi Sunak and French President Emmanuel Macron have expressed condolences.