Former Co-operative bank chairman and Bradford councillor Paul Flowers has been arrested in connection with a drugs supply investigation, police said today.

West Yorkshire Police said officers arrested the 63-year-old in the Merseyside area last night and he is being questioned at a police station in West Yorkshire.

The Reverend Flowers, a Methodist minister, has been suspended by the church and the Labour Party after claims he bought and used illegal drugs including crystal meth, crack cocaine and ketamine.

It has also emerged that he resigned as a councillor in Bradford after inappropriate adult material was found on his Council laptop in 2011 and he faces questions over his expenses claims at a drug charity.

Mr Flowers, of Great Horton, has also now been told to hand back £31,000 as the political repercussions of his dramatic fall from grace gathered pace.

The troubled financial institution said it was seeking to recover contractual payments made to the former Methodist minister since he quit the £132,000-a-year role in June.

"When Paul Flowers relinquished his responsibilities in June, it was agreed, as per his contractual obligations, that his fees for the rest of his period of office would be paid," the bank said in a statement.

"Following recent revelations, the board stopped all payments with immediate effect and no further payments will be made."

An "internal fact-finding review" - looking at emails and other evidence - is being carried out by the bank.

Co-operative Group chairman Len Wardle resigned earlier this week, citing "serious questions" raised by the scandal.

He led the board that appointed Mr Flowers at the bank, which prides itself on its "ethical" practices but has recently agreed a rescue plan that would see US hedge funds take a large stake.