The founder and principal of a flagship free school has been arrested by police investigating an alleged fraud.
West Yorkshire Police confirmed a 41-year-old man has been arrested in connection with their investigation into the Kings Science Academy in Bradford, which was visited by Prime Minister David Cameron in 2012.
The force has not named the arrested man but he i s understood to be Sajid Raza, who set up the school in 2011.
Last year, it was revealed that the school c laimed tens of thousands of pounds in public money which was not used for its intended purposes amid claims of financial irregularities and nepotism .
An investigation by the Education Funding Agency (EFA) found "serious failings" in the financial management of the school.
The academy was one of the first free schools to open in September 2011.
It was praised by Mr Cameron on his visit in March 2012.
Detective Superintendent Lisa Griffin, head of crime for Bradford district, said: "As part of West Yorkshire Police's ongoing investigation into matters at Kings Science Academy, Bradford, a 41-year-old man has today been arrested at premises in Bradford and is currently being questioned in relation to suspected fraud offences."
Mrs Griffin later said the man had been bailed pending further inquiries.
The Department for Education said it sparked the police probe by referring the Academy to the UK's national fraud reporting centre, Action Fraud, after receiving allegations of wrongdoing.
A DfE spokesman said: "The department acted as soon as it received allegations of wrongdoing at Kings Science Academy. We formally investigated and referred the case to Action Fraud.
"This resulted in a police investigation which is ongoing. Separately we are recovering appropriate funds.
"All free schools are held to rigorous account. The vast majority are performing well with three-quarters rated good or outstanding. But where there is failure we will not hesitate to intervene."
Lib Dem Bradford East MP David Ward welcomed today's developments in the police investigation.
Mr Ward has raised a series of questions about the management of the academy and the role of Tory vice-chair Alan Lewis, the school's executive patron. The school is built on land owned by Mr Lewis.
On Monday, in the Commons, he asked Education Secretary Michael Gove what steps his department was taking.
Mr Gove said he had to careful not the prejudice the police investigation
Mr Ward replied: "That is disappointing, because of course the head of a maintained school would have been on his bike long ago."
Labour MP Kevin Brennan asked the Secretary of State: "Mr Lewis is not just a benefactor; he is a landlord who will receive £12 million in rent in years to come from the school, as well as a vice-chair of the Conservative Party and a major Tory donor.
"Is that anything to do with the fact that the Secretary of State has refused to take any action whatsoever against anyone since this scandal broke?"
Mr Gove replied: "It is important to place on the record the fact that Mr Lewis is receiving for the property an appropriately guaranteed market rent - less than he was receiving for it beforehand."
The Secretary of State defended his department's handling of the case and said: "The law must follow its course."