Tory MP Crispin Blunt has been arrested on suspicion of rape and the possession of controlled substances.
The former minister, who is MP for Reigate, was held by Surrey Police on Wednesday morning.
In a statement the 63-year-old MP said he will "co-operate fully" with the ongoing investigation and is "confident" that he will not be charged.
He said he has been interviewed twice over the incident, the first time three weeks ago when he "initially reported my concern over extortion".
After identifying himself, Mr Blunt had the whip suspended pending the outcome of the police investigation, meaning he is now an Independent.
Mr Blunt wrote on social media: "It has been reported that an MP was arrested yesterday in connection with an allegation of rape. I am confirming that MP was me.
"The arrest was unnecessary as I remain ready to co-operate fully with the investigation that I am confident will end without charge.
"I do not intend to say anything further on this matter until the police have completed their inquiries."
He served in the Ministry of Justice as the minister responsible for prisons and probation between 2010 and 2012.
The police were unable to say if the controlled substances were drugs, as tests are being carried out.
A police spokesperson said: "We can confirm a man was arrested yesterday morning (October 25)… on suspicion of rape and possession of controlled substances.
"He has been released on conditional police bail pending further inquiries."
The Tory Party has declined to comment on Mr Blunt's arrest.
It is the latest in a string of arrests of sitting MPs and the latest blow to Rishi Sunak and the Conservative Party, which has been hit by a string of sleaze allegations.Tory MP for Wellingborough Peter Bone was suspended on Wednesday from the House of Commons for six weeks after bullying and sexual misconduct claims.
The Commons approved the sanction against the MP, who is sitting as an independent after losing the Conservative whip.
A recall petition will be arranged which will trigger a by-election if signed by 10 per cent of voters in the Northamptonshire constituency.
Last month disgraced ex-Tory MP Chris Pincher quit after losing his appeal against an eight-week suspension over groping allegations.
A separate Conservative MP, in his 50s, was arrested on suspicion of rape in May 2022.
The MP in his 50s is currently on bail until mid-February 2024 on allegations of sexual assault, abuse of position of trust and misconduct in a public office.