A former bank chief who was exposed by the Mail on Sunday buying drugs has been arrested on suspicion of supplying drugs.
Former Co-op bank chairman Paul Flowers was arrested by police in Merseyside and taken to a police station in West Yorkshire for questioning.
The 63-year-old Methodist minister has been suspended by the church and the Labour party as a result of the story.
He was also forced to quit Bradford council after “inappropriate adult content” was found on his computer.
The Mail on Sunday published a video on Sunday showing Flowers meeting a drug dealer in Leeds and looking to buy cocaine, crack and crystal meth.
The newspaper paid 21-year-oldmale escort Ciaron Dodd for the footage which it published online.
The Times reports that Dodd has now been sacked by the Manchester Lads escort agency for breaching client confidentiality.
A statement on the escort website said: “Although other factors caused Mr Flowers’ newspaper exposure and subsequent journalistic investigation into his use of escorts, it doesn’t excuse the behaviour of an escort who was paid for discretion to go back on that promise in order to obtain a newspaper fee.”
“In the 11-year history of Manchester Lads, nothing like this has ever happened before.
“The majority of escorts are decent people who provide complete discretion for their customers.”
The Times reports that despite being sacked by Manchester Lads, Dodd has increased his overnight fee from £450 to £800 following his brush with fame.
It has emerged that the Co-op now wants Flowers to return £31,000 it had paid him when he resigned. Now the bank has vowed not to hand over any more cash.
A bank spokesman said: "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.
"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.
The assistant secretary of the Methodist Conference, the Rev Gareth Powell, acknowledged the risk that allegations against Flowers would "tarnish" the church's reputation.
Powell told the BBC: "I think inevitably some of the speculation has raised questions, as it always does for the church, about the trustworthiness of ministers.
"Inevitably, it's regrettable when the allegations made against one minister then tarnishes the extremely good and honourable work undertaken by all of our ministers.
"Certainly the actions that are now under public scrutiny inevitably raise a question about the role of the church."
It was reported today that Flowers was the subject of an inquiry into "lavish" expenses claims at the Co-op when he resigned from the mutual's group board in June. The BBC said he stepped down after being confronted with a dossier of his claims, compiled by the then-chairman Len Wardle.
He quit as chairman of the Co-op Bank at the same time after the group brought in banking industry veteran Richard Pym to replace him.
Powell told BBC Radio 4's Today programme that the Methodist Church dealt "appropriately" with Mr Flowers' historic convictions for indecency and drink-driving, but said the church was not informed of other concerns now being raised by different organisations.
"I don't think we were incurious," said Powell. "The necessary processes that dealt with the two convictions had reassured themselves that here was a person who could continue with our ministry like any other Methodist minister under the normal discipline of our ministry.
"I don't think it was being incurious. There is a fine balance to strike between curiosity on the basis of evidence presented and curiosity based on speculation and gossip."
Powell said that the church was given "no formal indication" by Methodist ministers of concerns about inappropriate behaviour by Flowers.
He added: "People make observations about those who are in the public eye, but we are not able to act on comments about a person's behaviour without any firm evidence.
"Clearly, it would have been immensely helpful to us if bodies had been rather clearer about some of the concerns in the past. Hitherto, we have dealt appropriately with what we have known about in a formal context."
A Conservative member of Bradford Council, John Pennington, said he and other councillors were told that Flowers was leaving the authority due to work pressures, and not as a result of pornography being found on his computer.
Pennington told the programme: "We were told he had resigned through pressure of other work commitments – ie, the Co-op Bank.
"He was a very believable, very plausible chap, always immaculately dressed. He speaks with confidence and even with an air of superiority. On the surface, a hail-fellow-well-met and seemingly well-connected.
"To be frank, I'm not surprised that he has worked his way up the greasy pole because he is very, very plausible. What does concern me is the seeming lack of any checks or any vetting procedure to stop him getting to the dizzy height that he got to."