According to sources close to the investigation, the 37-year-old suspect is a well known businessman in Magalluf.
On Monday night, police sources said that it was just a matter of time before they made an arrest and officers moved at 4am yesterday.
He remained in custody until yesterday afternoon when he was driven back to his home where, in the garage, police found the black Range Rover which is suspected of being involved in the incident. Later it was towed away for a forensic investigation but police sources said that a lot of evidence has been provided, in particular videos of the incident taken by holiday makers on their mobile telephones.
One was posted on Youtube yesterday.
One of the theories which the police are working on is that the driver became trapped in the one thousands plus people in Punta Ballena at 3am on Monday morning and was startled when a group of people apparently began banging on his Range Rover.
It was at that point the driver continued to proceed through the crowd, allegedly running over and injuring a total of five British holiday makers.
Four remained in a private clinic yesterday but were said to be stable.
However, a female victim remained in Son Espases Hospital and she was said to have been in a serious condition.
The police investigation continues.