Three Chinese detained by South Korea over illegal fishing have been freed following protests from Beijing and were preparing to return home Saturday, the coastguard said.

Their 63-ton boat overturned and sank in the Yellow Sea on December 18 after ramming a 3,000-ton South Korean coastguard vessel. Two Chinese crewmen were killed.

The three crewmen were detained for hampering a crackdown by the coastguard on another Chinese trawler. Four South Korean officers were wounded when the fishermen attacked them with iron pipes, clubs and shovels.

A diplomatic dispute began after China demanded that South Korea pay compensation for the sinking of the fishing boat and punish the coastguards involved.

Seoul's foreign ministry said it would act calmly to settle the row and the fishermen were later freed without charge.

South Korea is eager to secure China's help to restrain North Korea, which launched a deadly bombardment of a South Korean island last month.

"We decided not to indict these crew as they were not actively involved in the crime at that time. They also fully cooperated in our investigation," Yonhap news agency quoted an unidentified coastguard official as saying.

Illegal fishing by Chinese vessels is common in South Korean waters. The coastguard said 332 Chinese boats were caught last year.