The BBC's "Newsnight" programme says the officer told them that Smith was arrested in the early 1980s during an investigation into child-sex parties. He said that Smith was released within hours and officers were ordered to hand over their notebooks and video footage.
After Smith died in 2010, prosecutors revealed that several men had accused the lawmaker of abusing them as teens. They said Smith was never charged, but should have been.
The new claim, aired late yesterday, adds to allegations that a toxic mix of sexual abuse, power and silence scarred the lives of British children for decades. The government has ordered a public investigation.