The former News of the World crime editor was arrested today on suspicion of paying police officers.
Lucy Panton, who is married to a Scotland Yard detective, is being questioned at a south London police station after officers swooped on her Surrey home at dawn.
The 37-year-old is the seventh suspect arrested under Operation Elveden, which runs alongside the Operation Weeting hacking inquiry.
Ms Panton, who has two young children, was promoted from crime correspondent to crime editor in October 2005.
She remained at the paper until it was shut down at the height of the hacking scandal in July.
Elveden was launched after officers were handed documents suggesting News International journalists made illegal payments to police officers.
A Metropolitan Police spokesman said a woman was arrested "on suspicion of committing offences involving making payments to police officers for information" at 6.15am.
He added: "She was arrested at a residential address in Surrey and has been taken to a south London police station where she remains in custody."
Ms Panton, who has also worked for The People, is the first Elveden arrest since Sun district editor Jamie Pyatt, 48, was held last month.
Others questioned as part of the inquiry include former News International chief executive Rebekah Brooks, ex-Downing Street communications chief Andy Coulson, former News of the World managing editor Stuart Kuttner, the paper's former royal editor Clive Goodman and a 63-year-old man whose identity has not been disclosed.
Mrs Brooks and Mr Coulson are both former editors of the News of the World, which was closed in July at the height of the hacking scandal following revelations that murdered teenager Milly Dowler's phone was involved.
Elveden was launched in the summer after it emerged that News International handed documents to Metropolitan Police officers investigating phone hacking which indicated illegal payments had been made to police.
Sir Paul Stephenson, the then Met commissioner, said in July that evidence from the publisher suggested a small number of officers were involved.
Force chiefs recently revealed the final total of people whose phones were hacked by the News of the World will be about 800.
Deputy Assistant Commissioner Sue Akers, the head of Operation Weeting, says she is confident her officers have met all the likely victims of the tabloid's activities.
The phone hacking scandal led to the closure of the News of the World after 168 years, prompted a major public inquiry, and caused the resignation of Metropolitan Police commissioner Sir Paul and assistant commissioner John Yates.