VALLETTA — Malta on Wednesday arrested a tycoon 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 said, in the latest development in the long-running case that has raised questions about the rule of law in Malta.

Before her 2017 murder, which sparked outrage and protests in the Mediterranean island, Caruana Galizia reported on corruption — including alleging that a company owned by Fenech was connected to high-level politicians.

The Maltese government has faced a torrent of criticism over its handling of the case, and Caruana Galizia's son on Tuesday called for the tourism minister and the prime minister's chief of staff to resign over alleged planned payments from Fenech's company.

"We have arrested a man as part of our investigations into the murder of Daphne Caruana Galizia," a high-ranking police source said.

"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 and blue yacht Gio was accompanied back to port and placed under tight surveillance by the police and army.

He was believed to have been heading to Italy, though that was not his final destination, the Times of Malta newspaper said.

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 on Tuesday he had promised a pardon for naming the person who ordered the attack, which made headlines around the world.

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 Malta.

He is CEO of one of the country's most powerful business groups, the Tumas Group, which runs among other things the Hilton Malta and Portomaso Casino.

Malta's Financial Intelligence Analysis Unit (FIAU) identified Fenech as the owner of a company 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.

Much of her work had been centered 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 planned deposits 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.

Mizzi is currently the country's tourism minister.

His brother Paul tweeted that "we got here in spite of Joseph Muscat", as a protest was called for later Tuesday outside the prime minister's office.

Civil society group Repubblika, which is organizing the protest, said Muscat had "protected" Mizzi and Schembri.

The prime minister said Wednesday there was no evidence he knew of linking politicians to the murder, and insisted it was his order for police to increase surveillance that prevented Fenech's "potential escape".

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