The suspected leader of the Basque separatist group ETA, Mr Ignacio Gracia Arregui, and his wife were arrested yesterday in south-west France, police said.
Also known as "Inaki de Renteria", he is suspected by Spanish authorities of planning an attempt on the life King Juan Carlos of Spain in 1995.
The Spanish Interior Minister, Mr Jaime Mayor Oreja, confirmed the arrest on the sidelines of a Spanish-German summit in La Granja, Spain.
Mr Arregui was detained yesterday evening in Bidart, a town in France's south-western Basque region close to the Spanish border.
In 1992 the man believed to be leading ETA at that time, Francisco Mujica Garmendia, was also arrested in the area.
The arrest comes after Spanish authorities said they had dismantled a key layer of ETA's hierarchy this week following the arrest of 20 leading supporters of the separatist group in raids across Spain.
Since ending a self-imposed ceasefire in December, ETA has intensified its campaign of violence. The group has either claimed responsibility or is thought to be behind a dozen assassinations since January, seven of them since mid-July.
The Spanish Prime Minister, Mr Jose Maria Aznar, and the German Chancellor, Dr Gerhard Schroder, are due to travel today to Hernani, a stronghold of the Basque separatist movement in northern Spain, to inaugurate a museum dedicated to the sculptor Eduardo Chillida. King Juan Carlos and Queen Sofia were also due to take part in the ceremony.
In 32 years of armed struggle, ETA has been responsible for the deaths of 781 people, according to the Spanish Interior Ministry figures.
ETA was founded in 1959 by a small group of Basque students who split with the Basque nationalist political party in frustration at its moderate stance.
Meanwhile, yesterday Mr Jose Ramon Rekalde, the retired Spanish Socialist politician wounded in a failed assassination attempt on Thursday, underwent surgery to have a bullet lodged in his jaw extracted.
The shooting of Mr Rekalde (68), thought to be the latest in a series of ETA attacks as part of a summer offensive, was believed to have been carried out by a woman, rare for an ETA attack.
Hospital officials said Mr Rekalde was in a serious, but stable, condition after four hours of surgery.
Mr Rekalde, who had held the posts of justice minister and education minister in the Basque regional government, was shot at close range near his home on the outskirts of the coastal city of San Sebastian, near the French border.
Politicians from across the spectrum condemned the attack, and anti-ETA protesters mounted demonstrations in three Basque cities yesterday.
Mr Juan Jose Ibarretxe, president of the semi-autonomous Basque region, condemned ETA for placing a "stain" on the Basque image worldwide.