Both Spanish and UK authorities confirmed the arrest of Eneko Gogeaskoetxea Arronategui, who is believed to be a member of the separatist Basque group ETA.
For decades the militant group has waged a war of independence for the Basque region, and has been blamed for hundreds of deaths in Spain.
The BBC reported that the 44-year-old was apprehended in an intelligence-led operation in Cambridge, in which a residential address and two businesses were searched.
(From GlobalPost in Spain: Spanish mobs block evictions)
Gogeaskoetxea is suspected of belonging to a cell that plotted to kill King Juan Carlos in Bilbao in October 1997, during the opening of the Guggenheim Museum.
The Spanish Interior Ministry said in a statement that Gogeaskoetxea was among ETA members who planned to launch grenades at the museum in Bilbao.
Reuters reported that he escaped from Basque police the same day, after a shootout which left one officer dead.
The agency said Gogeaskoetxea had been living with his family in Cambridge until his arrest.
ETA declared a permanent ceasefire on January 10, which was rejected by Spain because it did not include full disarmament.
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