"MSC Chitra has tilted 80 degrees and the total oil spill is nearly 50 tons, Arun Singh, Commandant (Operations), Coast Guard told PTI.
He said so far, 300 containers carrying oil have tumbled into the water.
A worried Chief Minister Ashok Chavan said, "This is a serious issue. The Coast Guard and the defence people are looking into it. We have already filed cases against the captains of the two ships which are from abroad."
"Today I am going to do an aerial survey of the site but I would say the state and the Union government is doing its best. Definitely it is a matter of concern and we have advised the people in that area not to go in for fishing because fishes and the marine life in that area is bound to be affected by this oil slick. We are trying to contain it as far as possible," he added.
Two Panamanian cargo ships -- MSC Chitra and MV Khalijia-111 -- collided on Saturday off the Mumbai coast causing an oil spill from one of the vessels.
Thirty-three crew members, including two Pakistanis, were rescued following the incident.
The Navy and the Coast Guards carried out anti-pollution operations for the third consecutive day on Monday to check and neutralise the oil spill.
Six coastguard vessels and a helicopter with anti-pollution dispersal spray systems were pressed into service on Sunday to contain the oil spill.
A high-level meeting, to be attended by the officials of the Maharashtra government Environment Department, National Disaster Response Force, Brihanmumbai Municipal Corporation, Shipping department, Mumbai Port Trust and other concerned agencies has been convened to assess the situation and steps to be taken to bring it under control, sources said.
Fishing associations have been also requested not to carry out any fishing activities till the oil spill is contained, officials said.
Officials are yet to locate the leakage. The thick oil slick has been sighted two to three km around the vessel Chitra.
"Traffic has been suspended as the containers are still sighted floating into the channel thus making navigation hazardous," a Coast Guard official said.
The Directorate General of Shipping has initiated an investigation into the incident, Directorate General of Shipping's Chief Nautical Advisor M M Savvi told PTI, adding "the Coast Guard and senior officials (Directorate General of Shipping) are now at the site".
According to officials, Chitra was carrying about 1,200 containers, which had over 266 tons of fuel.
Deputy police commissioner Khaled Qaiser said that an FIR has been registered against captains and crew members of both the cargo ships under relevant sections of IPC and
Environment Protection Act at the Yellow Gate police station.
The crew members were booked under section 280 (Rash navigation of vessel), 336 (endangering life of others) and 427 (mischief causing damage) of IPC and relevant sections of Environment Protection Act, he said.
So far nobody has been arrested, the DCP said, adding that all crewmembers will soon be summoned to the police station for questioning.
Additional Coast Guard Pollution Response Equipment has also been mobilised from Goa and assistance is also being taken from ONGC, JNPT and other agencies.
The state administration, Pollution Control Board, Maharashtra Maritime Board and the Bombay History Natural Society have been kept on high alert for mobilisation of response resources for shore clean up.
MSC Chitra, the outbound merchant vessel from Jawaharlal Nehru Port Trust (JNPT), collided with MV Khalijia-III, at 0950 hours on Saturday when the latter was sailing towards Mumbai Port Trust (MPT), off Mumbai harbour, for berthing.
The Indian captain and 32 crewmembers of Chitra were evacuated and the ship was grounded in the vicinity of the Prong Reef Lighthouse.