The news comes after a disastrous Election night for the Limp Dumbs, with the Party losing seats from the 2005 count and losing several key figures, including Dr Evan Harris and that bloke who once made the papers for knobbing a Transylvanian anorexic.
Metropolitan Police sources confirmed the arrest, which was part of a covert operation implemented after an anonymous tipoff that political prostitution may be happening in the Cowley Street area of London.
A Scotland Yard spokesman said, "as part of the operation, an undercover officer observed the suspect adopting a provocative pose outside Lib Dem HQ."
Consulting his notebook, the spokesman added, "The officer approached the suspect, purporting to be a representative of the Conservative Party.
"The officer requested that the suspect elaborate, and the suspect then said, "Basics support is a hand in the Treasury and, an oral role in the Home Office, but it's PR for the full Monty, OK ducks?"
The spokesman said that at this point the officer identified himself and the suspect was arrested on suspicion of prostitution.
Sources within the Liberal Democrats were unavailable for comment as they were too busy working out how to stroke Peter Mandelson if needed. However, Vince Cable was keen to point out that he'd predicted it all.