The Chief Constable of Cleveland and his deputy were today suspended from their posts after being arrested by detectives investigating allegations of misconduct, abuse of position and corrupt practice.
Sean Price and his deputy Derek Bonnard were arrested this morning and taken to a police station in North Yorkshire where they are being questioned by detectives.
A woman, thought to be a member of the Cleveland Police staff, was also arrested on suspicion of the same offences and remains in custody.
The investigation is being led by officers from Warwickshire Police Force after allegations were made in may against present and former members of Cleveland Police Authority.
In a statement the police authority said: "The authority can confirm that two chief officers have been suspended from their posts with Cleveland Police while the investigations are being considered.
"It should be emphasised that suspension is a neutral act and it should not be inferred from the decision to suspend that the potential conduct matters have been proven in respect to the two chief officers concerned."
The statement said that in suspending the officers the authority was following "prescribed processes and procedures".
It added: "The authority has taken the decision to refer these matters to the Independent Police Complaints Commission.
"Cleveland Police Authority is unable to make any further comment at this stage."
The inquiry was being conducted by Warwickshire Police chief constable Keith Bristow, with the assistance of officers from North Yorkshire Police.
The Cleveland Branch of the Police Federation said it could not comment on the allegations but hoped the matter would be concluded as quickly as possible.
Its statement added: "This news has come as a massive shock to our members who are already facing massive concerns with regards to their pay and conditions of service, along with pension worries."
A Home Office spokesman said: "This is an operational police matter and it would not be appropriate to comment."