A man has been arrested by police investigating a murder by suspected IRA members which has threatened powersharing in Northern Ireland.

Police believe the killing of Kevin McGuigan in east Belfast was a revenge attack by republican associates of former IRA commander Gerard "Jock" Davison, who was shot dead in May.

The revelations have created a political crisis at Stormont and prompted Democratic Unionist calls for British Prime Minister David Cameron to intervene to suspend the devolved Assembly in Belfast and order renewed negotiations, as well as some form of independent monitoring of the IRA ceasefire.

PSNI Chief Inspector John McVea said: "Detectives from Serious Crime Branch, investigating the murder of Kevin McGuigan, have arrested a 41-year-old man in east Belfast this morning, Wednesday 2 September.

"The suspect has been taken to the Serious Crime Suite at Antrim Police Station for questioning."

This is the twelfth arrest in the investigation.

Chief Constable George Hamilton has said the Provisional IRA still exists and some members were involved in the murder of the father-of-nine last month.

The revelations have shaken the political establishment in Northern Ireland, following Sinn Féin assurances that the IRA had gone away and the assessment of a 2008 British and Irish Government-appointed Independent Monitoring Commission (IMC) report which declared that the IRA has disbanded its terrorist structures and relinquished the leadership necessary to wage war.