Journalist Caruana Galizia, described by supporters as a "one-woman WikiLeaks", had highlighted corruption in Malta, including among politicians, before she was blown up by a car bomb

Valletta (AFP) - Malta on Wednesday arrested a prominent businessman in connection with the murder of journalist Daphne Caruana Galizia, the day after an alleged middleman was offered a pardon to identify the mastermind behind the killing.

Maltese national Yorgen Fenech was detained on his yacht at dawn as he tried to leave Malta, a police source told AFP, in the latest development in the long-running case that has raised questions about the rule of law in Malta.

“We have arrested a man as part of our investigations into the murder of Daphne Caruana Galizia,” a high-ranking police source told AFP.

“He was on his boat at the time of arrest,” he said, defining Fenech as “a person of interest” in the case.

Fenech was intercepted just after 5:30 am local time (0430 GMT), and his sleek white yacht was accompanied back to port and placed under tight surveillance by the police and army.

Caruana Galizia, described by supporters as a “one-woman WikiLeaks”, had highlighted corruption in Malta, including among politicians, before she was blown up by a car bomb.

Maltese police and Interpol, which has been helping with the high-profile case, last week arrested several people as part of an anti-money laundering operation, including the alleged middleman.

Prime Minister Joseph Muscat said Tuesday he had promised a pardon for naming the person who ordered the attack, which made headlines around the world.

- ‘Must resign’ -

Three men are facing trial for allegedly carrying out the killing, but the mastermind has not been identified.

The force of the October 2017 blast reduced Caruana Galizia’s car to pieces and catapulted her body into a nearby field, witnesses said.

The 53-year-old left behind a husband and three sons, who accused Muscat of filling his office with crooks and creating a culture of impunity that turned Malta into a “mafia island”.

Fenech is the director and co-owner of Electrogas, which won a multi-million euro contract from the Maltese state in 2013 to build a new gas power station on the Mediterranean island.

Malta’s Financial Intelligence Analysis Unit (FIAU) also identified him as the owner of a company based in Dubai called 17 Black.

Caruana Galizia had written in her blog about 17 Black some eight months before her death, alleging it was connected to Maltese politicians.

- High-level corruption -

Much of her work had been centred on what the huge Panama Papers data leak revealed about corruption at the highest levels in Malta.

Leaked emails revealed in court appeared to show that Panama companies owned by then Energy Minister Konrad Mizzi and Keith Schembri, the government chief of staff, stood to receive payments from 17 Black.

The alleged deposits of thousands of euros a day into the two offshore companies was for unspecified services.

“A power station owner suspected of kicking-back payments to the Prime Minister’s Chief of Staff and Energy Minister has just been arrested in connection with my mother’s assassination,” Caruana Galizia’s son Andrew said on Twitter.

“It’s time for Mizzi and Schembri to resign and be placed under surveillance,” he said.

Malta had repeatedly refused to open a public enquiry into the killing but made a surprise U-turn in September and appointed a retired judge to head the probe.