Prime Minister Kevin Rudd called the Chinese-owned Shen Neng 1's accident "outrageous" and warned the badly damaged ship, which is stranded on a shoal, remained a serious threat to one of the world's great environmental treasures.

"This remains a serious situation. It remains a serious threat to the Great Barrier Reef," Rudd said after flying over the crash site off Australia's northeast.

He vowed to punish anyone responsible for the accident on the reef, the world's biggest and a major tourist draw which teems with marine and bird life.

Officials said dispersant chemicals had broken up a slick some three kilometres (two miles) long after the ship grounded on Saturday, while floating booms will be used to contain any further spills.

"There is no greater natural asset for Australia than the Great Barrier Reef. I take any threat to the Great Barrier Reef fundamentally seriously," Rudd said.

"From where I sit, it is outrageous that any vessel could find itself... off course, it seems, in the Great Barrier Reef.

"The practical challenge is to deal with this situation now. The practical challenge then is to bring to account those who are responsible."

He said under the Great Barrier Reef Marine Park Authority Act, fines of up to 5.5 million dollars (5.1 million US) could apply while the ship's captain could face up to three years in jail.

The Shen Neng 1 was travelling to China from Gladstone, a port which is set to play a major role in Australia's booming trade exporting natural resources like coal and liquefied gas to Asia.

The Australian Maritime Safety Authority said the 230-metre (754 feet) ship, carrying 975 tonnes of heavy fuel oil and 65,000 tonnes of coal, was not on an illegal route but was within the Great Barrier Reef Marine Park.

"The route they were following was a recognised and correct route, but obviously somewhere along the way something went wrong and they ended up on the Douglas Shoal which is in fact a restricted area," a spokeswoman said.

As investigations continue, Rudd said authorities would work to prevent any further oil spills and decide how to salvage the vessel, which officials say could be stranded for weeks.

Marine Safety Queensland (MSQ) said officials would look into whether other foreign ships were taking illegal short cuts through the Great Barrier Reef Marine Park.

"We've always said the vessel has ended up in an area in which it shouldn't be in the first place and how it got to that position will be the subject of a detailed investigation," MSQ general manager Patrick Quirk said.

"We're aware some ships don't always utilise best practice and that will be the subject of a commonwealth (national) review."

Quirk said officials were initially concerned the ship could break apart, creating an environmental disaster, but emergency workers on board now believe the structure is relatively stable.

"But I just want to say the risks are still there, and we're managing this on an hour-by-hour, risk-by-risk basis," he said.

Greens Senator Bob Brown, who flew over the ship on Monday, said it remained a "ticking time bomb" and called for an overhaul of shipping practices in the environmentally sensitive area.

"There needs to be pilots aboard and there should be very strict laws, including monitoring, of where these ships are," he told ABC Radio.

Conservation group WWF said the lack of safeguards around shipping in the reef was "akin to playing Russian roulette with one of the world's most treasured natural icons".

The number of Asia-bound tankers leaving Queensland ports is set to explode in the coming decade as Australia exports billions of dollars of its natural resources overseas.

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