Governor Issa Timamy was arrested yesterday in connection with last week's killings over two consecutive nights in the town of Mpeketoni and a nearby village that claimed nearly 60 lives. Another attack this week left at least five dead, officials said.
"The governor is in custody," Kenya's Criminal Investigations Department chief Ndegwa Muhoro said, adding the governor would appear in court later today.
"There are various charges lined up for him that are related to the attack," he said, without giving further details.
The accusations have stoked already tense political rivalry between Kenyatta and opposition parties.
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Timamy is a member of the opposition United Democratic Forum (UDF) party.
Survivors of the attack in Mpeketoni reported gunmen speaking Somali and carrying Shebab flags, executing non-Muslims and saying their actions were revenge for Kenya's military presence in Somalia as part of the African Union force fighting the Islamists.
Police yesterday also arrested 13 alleged separatists suspected of planning more attacks in the country's coastal region.
After the attacks, Kenyan security forces killed five people they suspected of involvement in the massacres, recovering AK-47 assault rifles as well as ammunition.
Three others have also been charged in connection with the killings, including a police officer, the owner and driver of a vehicle used by the attackers, and a suspect accused of running fake Shebab social media accounts.
The attacks have badly dented Kenya's tourist industry at one of its traditionally busiest times of the year, a key foreign currency earner and massive employer for the country.