Lord Mandelson has been released on bail after being arrested on suspicion of misconduct in public office.
The Metropolitan Police confirmed the 72-year-old was detained at a Camden address on Monday and questioned at a London police station before being released in the early hours of Tuesday pending further investigation.
The arrest follows an investigation into claims that, while serving as business secretary between 2008 and 2010 under Gordon Brown, he shared sensitive government information with Jeffrey Epstein.
Officers previously executed search warrants at properties in Camden and Wiltshire.
The Metropolitan Police said: “A 72-year-old man arrested on suspicion of misconduct in public office has been released on bail pending further investigation.
“He was arrested at an address in Camden on Monday, 23 February and was taken to a London police station for interview.
“This follows search warrants at two addresses in the Wiltshire and Camden areas.
“We are not able to provide further information at this stage to prevent prejudicing the integrity of the investigation.”
As things stand, no charges have been brought. Lord Mandelson has apologised to Epstein’s victims and continues to deny wrongdoing.
Misconduct in public office carries a maximum sentence of life imprisonment.