(Adds latest death toll in paragraph 5)

By Ahmed Elumami

TRIPOLI Aug 29 (Reuters) - Libyan authorities have arrested three people on suspicion of involvement in launching a boat packed with migrants that sank off the country's Mediterranean coast, killing up to 200 people, a security official said on Saturday.

The vessel, with up to 400 sub-Saharan, Syrian and Asian migrants on board capsized on Thursday, after setting off from the town of Zuwara, a centre of operations for people smugglers exploiting the anarchy in a country with two rival governments.

Libya has turned into a main transit route for migrants fleeing conflict and poverty to make it to Europe.

Three Libyan smugglers involved in launching the ill-fated boat and other vessels to take migrants to Italy have been arrested, said a security official, asking not to be named.

"They are in their twenties," he said. "We think that more are involved which we are still chasing."

By Saturday, 115 bodies had been recovered and about 198 migrants rescued, officials said.

Arrests of smugglers are rare in Libya, where the judiciary has little power since the country is effectively controlled by former rebel groups which helped to oust Muammar Gaddafi in 2011.

On Thursday, Zuwara residents staged a protest to demand authorities clamp down on smugglers who use the town to launch boats due to its proximity to the Italian island of Lampedusa.

Libya has asked the European Union for help to train and equip its navy, which was largely destroyed during the 2011 uprising.

But cooperation was frozen in 2014 as the European Union boycotted a self-declared government controlling western Libya, which seized the capital Tripoli a year ago by expelling the internationally recognized premier to the east.

Western and most Arab powers only deal with the eastern-based government, which has no control of western Libya where smugglers operate.

The number of migrants crossing the Mediterranean to reach Europe has passed 300,000 this year, up from 219,000 in the whole of 2014, the U.N. refugee agency UNHCR said on Friday. (Reporting by Ahmed Elumami, Writing by Ulf Laessing, Editing by Mark Heinrich and Angus MacSwan)