A 42-year-old man from the Chester area was arrested on suspicion of theft - he has been remanded in police custody at a police station in Cheshire pending further inquiries

Scotland Yard

Mr Burrell is reportedly being held overnight in a Cheshire police station and is due to be questioned by police during Friday.

Police are said to have raided Mr Burrell's cottage in the early hours of Thursday, ripping up carpets and floorboards in a 12-hour search.

The 42-year-old, who was Diana's friend and confidant for more than 10 years, is thought to have been in the house at the time with his wife and two sons.

A Scotland Yard spokeswoman confirmed that a man had been arrested on suspicion of theft.

Her rock: Paul Burrell with Princess Diana on Angolan trip

"He has been remanded in police custody at a police station in Cheshire pending further inquiries," she said.

The arrest is believed to be part of an ongoing investigation into the disappearance of the model boat, which was a wedding present to Prince Charles and Princess Diana from the Emir of Bahrain.

Two other people have been arrested in connection with the investigation.

Two other arrests

In November, a 48-year-old man from central London was arrested on two allegations of theft.

A 50-year-old man was arrested that same month in connection with handling stolen goods.

Both men were bailed and are due to return to police stations this month.

Buckingham Palace and St James's Palace said they knew nothing about the arrest, as reported by The Mirror.