Willie Mwaluka, a police spokesman, said Cassim Chilumpha was arrested at his home in Blantyre late on Friday and transferred to custody in the capital, Lilongwe.
Mwaluka said: "We arrested him on allegations of planning to overthrow [the] government. More details will be given in due course."
Bingu wa Mutharika, the president, tried to sack Chilumpha in February for arrogance and abusing his oath of office, but was blocked by Malawi's high court, which ruled that he lacked the power to unseat his deputy.
Chilumpha, widely seen as a potential presidential candidate in 2009, is vice-chairman of the United Democratic Front (UDF), the party that sponsored wa Mutharika's presidential campaign in 2004. However, wa Mutharika left the UDF in February last year, saying that his anti-corruption policies were being resisted within the party.
Wa Mutharika's subsequent decision to form another party enraged the UDF, which then made corruption claims against him and tried to have him impeached. Foreign donors, however, said that impeachment could put aid at risk.
Mwaluka said police also arrested Yusuf Matumula, a business associate of Bakili Muluzi, the former president whose allies have been among the primary targets of wa Mutharika's anti-graft drive.
Chilumpha's lawyer said he was seeking bail for his client, and the UDF described the arrest as political persecution.
Sam Mpasu, the UDF spokesman, said: "This is what this government is bent to do. They will arrest any UDF man they see as a political threat. We are getting worse every day and the international community is just watching."
Chilumpha was arrested last year over his alleged involvement in a corruption scandal during his tenure as minister of education five years ago, but the government later dropped the charges.
The government of the Republic of Malawi: http://www.malawi.gov.mw/
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