Nine counter-terrorism officers raided the MP's London home, frightening his 15-year-old daughter Verity and wife Alicia who were there.
Mr Green was seized at his constituency home in Ashford, Kent, and held at Belgravia police station for nine hours, only one of which was used to question him about his alleged crime - leaking information embarrassing to the Home Office.
As fury grew over the way an elected MP had been treated after helping to expose Government blunders, the Evening Standard revealed that when his Commons and constituency offices were searched his mobile phone, Black-Berry and computers were all removed for examination, complete with confidential files stored on them.
His e-mail account had been disabled. Messages were bounced back with the terse explanation: 'your message wasn't delivered because of security policies'. A Tory source said angrily: 'He cannot do his job, which means the voters of Ashford have been disenfranchised by the police.'
The affair was turning into the biggest row over Whitehall leaks since the prosecution of civil servant Clive Ponting in 1985, over leaks about the Belgrano sinking, and the jailing of Sarah Tisdall in 1983 for leaking secrets about US cruise missiles in the UK.
Plastic boxes full of items taken from the MP's constituency office are taken away by a police officer. There is growing anger over the way Damian Green, below, has been treated. By contrast, however, the molehunt at the Home Office was for the source of a stream of stories that embarrassed the Government rather than threatened national security. They included that 5,000 illegal migrants had been cleared to work in security.
Last week a junior Home Office official, aged 26, was arrested. Tory leader David Cameron said police and ministers had 'serious questions' to answer, particularly about the use of counter-terrorism officers. He added the operation was 'extraordinary and frankly rather worrying.'
David Davis, the former Shadow Home Secretary, said Mr Green's job was exposing failures in the Government and that the arrest was 'reminiscent of Robert Mugabe's Zimbabwe'.
He added that Winston Churchill relied on a Whitehall whistleblower to expose lack of preparedness before World War II.
'If the police had applied these rules in the Thirties, Churchill would not have been Prime Minister - he would have been a prisoner,' he said.
Liberty director Shami Chakrabarti said: 'The fundamental duty of the Metropolitan Police is to protect Londoners from harm, not the Government from political embarrassment.' Mr Green, 52, was finally released on unconditional bail shortly before midnight without charge but must return to face further questioning in February.
The MP described his arrest as 'astonishing'. Speaking outside Parliament this morning he said: 'I emphatically deny I have done anything wrong.' Some Tories suspected that the action was an attempt to intimidate other civil servants tempted to leak documents, especially from the Treasury where ministers think there is a high-placed Tory mole.
Furious party officials said the move was of such a sensitive nature that Downing Street and the Home Office must have been notified.
Extraordinarily, it emerged that Mr Cameron, Boris Johnson and Commons Speaker Michael Martin were all informed about the raids.
Mr Green's office in Ashford, Kent: Colleagues have described his arrest as 'Stalinesque'
Yet Gordon Brown insisted he had no advance knowledge of Mr Green's arrest.
Source: Daily Mail
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