Computers seized at the newspaper offices are also being examined in a bid to find out who provided the newspaper with photographs taken of the murdered bride after she was found strangled in her hotel room and published last weekend.
Hosany had earlier apologised for the images appearing on his pages and indicated he would cooperate with any police inquiry. He stopped short of agreeing to identify the source.
But after the political furore in the Republic and the North, and the anger of the McAreavey and Harte families, police on the island decided to arrest him. He was detained at his house at 7.30am. Tonight police in Port Luis confirmed he was still being held, but it is unclear if he will face charges.
Following the bungled police investigation and the acquittal of the two men accused of murdering Michaela while she was on honeymoon with her husband John McAreavey at the Legends Hotel in January last year, detectives are under pressure to identify who passed the photographs to the newspaper.
In an exclusive interview with the Irish Independent, Mauritius Prime Minister Navin Ramgoolam said police have established that the source of the pictures did not come from within the police force itself but from someone else close to the case.
"I want to extend my sympathies to the McAreavey and Harte families for what happened on Sunday," Mr Ramgoolam said.
"It is disgusting, disrespectful and only adds to their grief. There is no excuse for this."
The Mauritian police last night independently confirmed that it had identified the person suspected of giving the photos to the newspaper.
And it has also emerged that another newspaper was given the same morbid pictures - allegedly from the same source.
"A journalist at (Saturday newspaper) 'Journal de Samedi' was given the same pictures, but the editorial board refused to publish them," said a police source.
But the Mauritian 'Sunday Times' decided to splash the images on its front page and across an inside spread.
It came just days after two hotel workers - Sandip Moonea and Avinash Treebhoowoon - were acquitted of Michaela's murder by a Mauritian jury.
Michaela (27), from Co Tyrone, was strangled at the former Legends Hotel on the island in January 2011, while on honeymoon with her new husband, Down GAA player John McAreavey.
The Harte and McAreavey families said the hurt caused by the publication of the pictures cannot be undone.
"As an editor he made a calculated decision to use photographs and images that no responsible media outlet would have touched," they said.
"He further exacerbated his actions by printing an inexcusable editorial in a feeble attempt to justify what was wholly unjustifiable."
It has been a torrid week for the family, after John McAreavey returned from eight weeks in Mauritius in the knowledge that his wife's killer is still at large.
Mr Ramgoolam said: "I personally want John McAreavey and the Harte family to know that we will not stop until we find who killed Michaela.
‘‘A murder has been committed. It has not been solved. And we will leave no stone unturned until it is."
Mr Ramgoolam said he is writing to both the PSNI and gardai to invite them to send officers to help with the inquiry.
He added: "A judicial inquiry will begin within the next day or two and everything will be re-examined and every lead followed up. The fact remains that a murder has been committed, the culprit or culprits are still at large and we will stop at nothing until they are found."
The Supreme Court trial raised a number of concerns about the way in which the Mauritian police handled the investigation, with one of the accused alleging he was subjected to brutal torture to coerce him into making a confession.
Yet Mr Ramgoolam, who trained as a doctor at the Royal College of Surgeons in Dublin, is adamant the Mauritian police followed "due process throughout" and are not responsible for last Thursday's verdict.