Sion Jenkins, 39, a deputy headmaster, was arrested yesterday morning in Hastings, East Sussex.
Billie-Jo was battered over the head with an 18in metal tent peg as she painted the patio doors in the back garden of her home in Hastings.
Mr Jenkins and his wife, Lois, held a press conference shortly after the killing on 15 February at which they said that their 10-year-old daughter was the first to discover the body of Billie-Jo.
Mr Jenkins had returned home with two of his four natural daughters from a music lesson after leaving Billie-Jo alone for 40 minutes, the conference was told.
Mr and Mrs Jenkins, who last December assumed legal guardianship of Billie- Jo after fostering her for four years, said that they were devastated at the loss of their daughter.
The couple said they had been plagued by prowlers and nuisance telephone calls and had felt a "sense of unease" since January. Mr Jenkins said: "We moved to the house because of the park and because of the children. But January has been a very strange and uneasy month.
"As a family, we have felt uneasy about prowlers. On one occasion I was looking out of the back window and I thought I saw movement. I switched on the outside security light and got a fleeting glimpse of somebody moving about. Another time I saw somebody in the park staring at the house."
Mrs Jenkins, 35, a social services project manager in east London, said: "We had decided to move house because of the problems in the area."
The couple did not contact police about the recent prowlers and telephone calls.
Last night Mr Jenkins was being questioned at Hastings police station. He is the third man to be arrested. A man of 36 was released after questioning and a 44-year-old local man was released into secure psychiatric care. "A local man in his thirties was arrested this morning and was helping with inquiries," a spokesman for Sussex police said yesterday.Reuse content