Liberal Democrat MP Mike Hancock has been arrested on suspicion of indecent assault following allegations of improper behaviour towards a female constituent.
In a statement on his website, the 64-year-old Portsmouth South MP said he went voluntarily to a police station last night and "co-operated fully" with inquiries.
He was released on police bail without charge until January 10.
A Hampshire Police spokesman said: "A man has been arrested on suspicion of indecent assault following a complaint from a woman in Portsmouth.
"The 64-year-old man from the Fareham area was arrested at 10am on Tuesday.
"He was questioned by police following an allegation made on Friday September 24 and has been bailed until January 10 2011."
Mr Hancock declined to comment on the details of the case, but has previously denied any wrongdoing and insisted he only offered "help and support" to the 36-year-old woman.
Hampshire Police's involvement came as Parliamentary Standards Commissioner John Lyon was also reported to have received a complaint about the MP's behaviour.
Mr Hancock said: "I can confirm that I was questioned on Tuesday October 12 by officers of the Hampshire Police in relation to allegations made against me by one individual.
"I attended the police station voluntarily, co-operated fully and answered all questions that were asked. Normal processes now have to be followed by the police, which I entirely understand.
"In the circumstances, and in accordance with legal advice, it would be inappropriate for me to make any further comment on this subject as to do so could prejudice due process."
He appealed for his family's privacy to be respected and said he intended to "carry on normally" with his work as an MP and Portsmouth City councillor.
Conservatives on the city council have called for Mr Hancock to be suspended while the investigation is carried out.
Mr Lyon, the Westminster sleaze watchdog, has received a complaint about Mr Hancock and is considering whether to pursue it, his office confirmed.
In general however, the Commissioner does not undertake investigations into cases while the police are still involved in them.