Italy has declared a state of emergency in the regions worst hit by Wednesday’s earthquake as hopes of finding more survivors fade.

Prime Minister Matteo Renzi has pledged €50m (£42m) in funds for rebuilding.

At least 250 people are now known to have died and 365 were injured. Teams have continued to search the rubble of toppled buildings for a second night.

However, hundreds of aftershocks have hampered the efforts of the 5,000 rescuers.

• Search for survivors as it happened
• Read the survivors’ stories
• Aerial shots of quake-hit Italy
• In pictures: before and after

In addition to the funds, Mr Renzi cancelled taxes for residents and announced a new initiative, “Italian Homes”, to tackle criticism over shoddy construction.

But he also said that it was “absurd” to think that Italy could build completely quake-proof buildings.

It follows criticism in the Italian press over building standards in high-risk areas. Some of the buildings that collapsed had recently been renovated.

Historic towns do not have to conform to anti-quake building regulations, which are also often not applied when new buildings are put up.

Tourists among dead

The 6.2-magnitude quake hit in the early hours of Wednesday, 100km (65 miles) north-east of Rome in mountainous central Italy.

The worst affected towns – Amatrice, Arquata, Accumoli and Pescara del Tronto – are usually sparsely populated but have been swelled by tourists visiting for summer, making estimates for the precise number missing difficult.

More than 200 people died in Amatrice alone, Ansa news agency reported.

At least three Britons died in the quake, a local official in Amatrice told the BBC. The Romanian government said 11 of its citizens were missing.

Bodies are still being found in the town, including one discovered in the rubble of the Hotel Roma in the city late on Thursday.

An official with the fire department, Lorenzo Botti, admitted they were facing a race against time.

“The chances of finding people alive in these conditions, in this type of setting, well, it’s challenging,” he said.

But other rescuers said there was still hope, noting that one survivor was pulled from ruins in L’Aquila in 2009 three days after an earthquake that killed more than 300 people.

Search teams have asked locals to disable their wi-fi passwords to help efforts. The Italian Red Cross says home networks can assist with communications during the search.

Police have also arrested a man for attempting to break into and loot an empty home in the town, Ansa reported.

At the scene: BBC’s Damian Grammaticas in Pescara del Tronto

Two firemen burrowed deep into the rubble looking for a survivor. “It’s a dog,” one of them shouted out.

For half an hour the men kept digging. They passed water down to be given to the animal. And eventually they worked it free, then emerged, carrying it to the surface. There was a ripple of applause in the crowd.

“It doesn’t matter to us if it’s a person or an animal, we save it,” said Gianni Macerata, the fire officer in charge.

So the digging goes on. But so little is left of Pescara del Tronto it is unlikely that more survivors will be found here.

It seems unlikely too that this ancient little place, that has stood for centuries, can ever be rebuilt. Hundreds of years of history ended in an instant.

Read more from Damian