Detectives were tonight questioning the landlord of Joanna Yeates on suspicion of her murder.
Retired public school teacher Chris Jefferies, 65, was arrested at 7am today at his flat directly above the basement Victorian property he rented to the 25-year-old landscape architect and her boyfriend Greg Reardon, 27.
The bachelor's arrest came just 24 hours after he claimed he had watched as three people left Miss Yeates' flat in Canynge Road, in the upmarket area of Clifton, Bristol, on the night she vanished.
Neighbours have described Mr Jefferies, who sports a distinctive mane of straggly white hair, as a "nutty professor-type" who was active in his community - playing a prominent role in his local Neighbourhood Watch group.
He taught English at Clifton College, just yards from his flat, from the early 1970s before taking early retirement in 2001.
Mr Jefferies, a enthusiastic activist for the Liberal Democrats in Clifton, is also a member of the Clifton and Hotwells Improvement Society (CHIS), which campaigns to conserve buildings in the area.
Resident Tony Buss, 51, said: "Today's news is a shock and surprise."
He said the community had been worried about a killer on the loose.
Another neighbour, a 26-year-old man who did not want to be named, said: "It's all been pretty scary, especially for my girlfriend as I'm away most of the week so it's been pretty scary for her to be home alone."
Referring to Mr Jefferies, he said: "We see him all the time on the road. He's a bit of a nutty professor-type by the looks of it."
CHIS secretary RoseMary Musgrave said: "He's certainly an active member and does come to meetings from time to time. He's not a member of the committee though."
In 2005 he was at the forefront of efforts to stop building work on fields near his home.
He led the Canynge Road Campaign Group to save the fields from development and wrote a series of letters to Bristol City Council outlining the group's opposition to the scheme.
Ray Lowman, who lives in a flat opposite the mansion where Mr Jefferies and Miss Yeates lived, said: "I'm amazed by it really but also find it quite disconcerting. He is basically a pillar of society. One of the well-known familiar locals."
Mr Lowman acknowledged Mr Jefferies' at times unconventional manner of dress.
"It is one of the problems. His appearance is unusual," he said.
"I wouldn't say he was weird but unusual and the hair is affectation. A very intelligent man, very sharp."
Councillor Trevor Blythe, who represents Clifton Ward for the Lib Dems on Bristol City Council, said: "We were absolutely flabbergasted when we heard he'd been arrested, I didn't know him particularly well, but it was very surprising.
"It's a terrible tragedy what's happened, and I'm just flabbergasted that Mr Jefferies has been arrested and we await any developments."
Clifton College head Mark Moore said Mr Jefferies had at one time been the school's head of English and said there were no disciplinary issues recorded against him.
"There was nothing in his record at all and he took early retirement, which he is perfectly entitled to do," Mr Moore said.
"When a new head of English came into the school he decided to bow out at that point."
Earlier today, police took away on low loaders two cars - a silver Chrysler Neon parked on the street and a grey Volvo S40 that was on his drive - for examination.
Forensic officers have spent the day in both Miss Yeates' flat and Mr Jefferies' property - taking away large brown evidence bags from both. Yesterday, police took away the blue front door from Miss Yeates' flat.
She was last seen on December 17 and her snow-covered body was found on Christmas morning by a couple walking their dogs in Longwood Lane in Failand, North Somerset. She had been strangled.
Her parents, David, 63, and Theresa, 58, said they were pleased an arrest had been made.
An Avon and Somerset Police spokesman said: "Just after 7am this morning, police attended an address in Canynge Road and arrested a 65-year-old man on suspicion of murder.
"He has been taken into custody at a police station within the Avon and Somerset force area and detained for questioning."
Speaking outside his home yesterday, Mr Jefferies, who was wearing a long coat with a fur collar and was carrying a Waterstone's shopping bag, denied he had told police he saw Miss Yeates leaving with two unidentified people.
"It is a serious distortion of what I said to the police and I have no further comment to make as that, no doubt, will be distorted," he said.
Earlier, he had told Sky News: "I made some comment which was very, very, very much vaguer than that."
He added: "I definitely cannot say that I saw Joanna Yeates that evening. No."
A £10,000 reward has been offered to help police catch her killer and fresh CCTV was released of Miss Yeates buying cider in a branch of Bargain Booze on the night she vanished.
Anyone with information is asked to contact the Operation Braid incident room on 0845 456 7000 or Crimestoppers on 0800 555 111.