The Taiwanese coastguard said Monday it had arrested 41 Chinese fisherman in possession of 15 tonnes of illicit coral reef and endangered turtles near a disputed atoll in the South China Sea.

Taiwanese authorities detained the fishermen on March 22 after their 300-tonne vessel was discovered operating illegally off the shore of Tongsha island, the coastguard said, in the island's largest mission targeting rampant poaching in the contested waters.

Officials later recovered the harvested reef from the ship along with three endangered turtles and about 40 kilogrammes (88 pounds) of chemicals used to kill fish.

"The damage they caused to the Tongsha ecological system is hard to estimate," Allen Chen, a research fellow at Taiwan's Biodiversity Research Center, told AFP.

"The Chinese ship would have earned a large fortune if they could have sped away with the huge amount of valuable reef and sold it at home," he said, adding that Chinese demand for coral has surged in tandem with its continued economic development.

The atoll resides about 240 nautical miles from Taiwan's southern Kaohsiung port and is also claimed by China.

Prosecutors are preparing to indict the Chinese crew on charges of violating a wildlife protection law and the statutes governing trade between Taiwan and the mainland. If convicted, the fishermen could face up to a year in jail along with fines.

Taiwan and China split in 1949 at the end of a civil war, however, ties have improved since 2008 after the China-friendly Kuomintang party came to power on the island.

Rival claimants in the South China Sea have been beefing up their military presence in the disputed region, and other countries have complained China is becoming increasingly aggressive in pressing its case.

China claims virtually all of the South China Sea, while the Philippines, Vietnam, Malaysia, Brunei and Taiwan also have partial claims.