Belfast police are questioning a man (33) about the murder of loyalist Alan McCullough, whose body was found in a shallow grave last week.
He was arrested last night as detectives investigating the killing released another man (35) they had been questioning.
That man was rearrested soon afterwards and charged with possession of items likely to be of use to terrorists. He was due to appear in Belfast Magistrates Court today.
The Ulster Defence Association said McCullough was murdered because he was a military intelligence spy who double-crossed both factions involved in an internal feud in the terror organisation.
The UDA also accused McCullough of being heavily involved in four assassinations.
The UDA killed McCullough, a former ally of ousted loyalist Johnny Adair, after apparently agreeing to lift a death sentence against him.
The 21-year-old fled to England after the UDA drove supporters of Adair's ruthless C Company unit out of Northern Ireland at the height of the internecinewar.
He returned to Northern Ireland believing he had brokered a deal for his safety. Less than two weeks later he vanished from his home and was found shotdead nine days later.
PA