By Barbara Goldberg

(Reuters) - A private yacht ferrying 27 friends and family to watch Fourth of July fireworks capsized off New York's Long Island and three children drowned, Nassau County Police said on Thursday.

The children's bodies were found in the cabin of the submerged boat in the waters off the town of Oyster Bay after a 911 call was placed at about 10:10 p.m. on Wednesday, police said.

"These individuals were out observing a fireworks show. They were returning from this fireworks display," Detective Lieutenant John Azzata of Nassau County Police said at a news conference on Thursday.

Investigators were trying to determine what caused the 34-foot (10.4-metre) boat to sink, including overcrowding, a strong thunderstorm in the area at about the same time, a mechanical problem and wakes from other boats.

"We are looking into possible overcrowding, there were 27 people on the boat," Azzata said.

Also under investigation is whether the 1984 Silverton cabin cruiser was equipped with 27 life preservers for all onboard, as required by law. Children under age 12 are required to wear a life jacket while on board, except while in the cabin, Azzata said.

Police scuba divers and other authorities found the bodies of a 12-year-old boy, an 11-year-old girl and an 8-year-old girl in the cabin of the sunken boat. None of the children has the same last name but it was unclear whether they were related, Azzata said. He declined to describe their relationship to the owner, whose boat was a "very recent purchase."

Neither the boat owner nor a second operator was suspected of driving while intoxicated, Azzata said. The district attorney's office was contacted, although it remains unknown whether criminal charges will be filed. Continued...