The 63-year-old Methodist minister, arrested in Merseyside on Thursday night, was filmed handing over £300 allegedly to pay for cocaine and other drugs.
He has since been suspended from both his Methodist Church and the Labour Party, which itself is under scrutiny for permitting Flowers to reach senior roles within Co-op.
In a statement, West Yorkshire Police said: “Officers have… arrested a 63-year-old man in the Merseyside area in connection with an ongoing drugs supply investigation.
“He has been taken to a police station in West Yorkshire where detectives will continue their enquiries.”
Flowers resigned from his post as deputy chairman of the Co-op Group in June following concerns about his expenses, according to a report on the BBC.
He was also forced out of its banking arm because of doubts about his competency for the job.
Labour has faced questions, including from Prime Minister David Cameron, about how much it knew of Flowers’ activities. But on Thursday, Labour leader Ed Miliband accused Cameron of “unjustified smears” over Labour’s links with Flowers.
Cameron has ordered an inquiry into how Flowers was considered a suitable chairman for the Co-op Bank.
