Morrisons’ group treasurer and head of tax was arrested in December after buying shares in Ocado before the £216m tie-up between the two retailers, it has emerged.

Paul Coyle was arrested after an insider trading investigation by the Financial Conduct Authority after he bought shares in online supermarket Ocado before the two supermarkets publicly revealed a lucrative partnership that would see Ocado launch an online grocery service for grocer Morrisons.

When the deal was revealed shares in Ocado soared and it was the best performing major stock in Europe last year.

According to the Telegraph, Coyle was arrested by Yorkshire police in Harrogate in December.

Coyle has not returned to work since the arrest, it is understood, and he is yet to be charged.

It is not known how many shares in Ocado are alleged to have been bought.

Morrisons launched its online grocery service earlier this month, initially delivering to Warwickshire. The service is set to extend to Yorkshire next month.

The news of potential insider dealing comes after a difficult Christmas for the retailer as like-for-likes fell 5.6% and it expects full-year profit to be at the lower end of expectations.