A former Royal Navy officer has been accused of murdering Scots businessman Derek Cowan in Barcelona last month.

William Madley, 46, from Huddersfield, Yorkshire, was arrested in Barcelona at the weekend after a five-week search, Spanish police revealed yesterday.

After appearing before an investigating judge at a closed door hearing he was sent to the city's Modelo prison accused of murdering former his business partner Derek Cowan, also 46, from Larkhall, Lanarkshire, on October 8.

Mr Cowan's body was found at his apartment in the Eixample neighbourhood. It is alleged he had been bludgeoned to death.

The discovery was made by German Andreas Langweider, a business associate. Earlier, it is claimed, the victim had told Mr Langweider that he had recently met Mr Madley in the street by chance and was meeting him again that day.

Reports linked Mr Cowan's murder to fraudulent share-dealing companies operating in Spain. Police were said to be investigating the Scot's suspected involvement in "boiler-room" operations in which high-pressure telephone sales techniques are sometimes used to sell worthless shares.

Mr Madley, who served in the Royal Navy aboard a nuclear submarine at Faslane during the late 1980s and early 1990s, was reported to have been a partner of Mr Cowan in a business involving property deals. But the pair were said to have parted following a disagreement over money.

Police in Barcelona would not give any details yesterday of how Mr Madley was traced in Barcelona and arrested.

He was ordered to prison to await trial after a private court hearing before the investigating judge in chambers on Sunday.

Before the arrest, a friend of Mr Cowan, John Irvine, 46, who runs a number of businesses Scotland, described his shock at the death, saying: "You don't expect your friends to be murdered, do you?

"Maybe if they move in certain circles, but he didn't. He was as popular in Barcelona as he was here, with loads of friends.

"He went to Barcelona for a job, and he'd already spent time in Manilla and in London before that.

"He was a bit of an adventurer, and liked a challenge. He had nothing to tie him down here, so he just went for it."

According to Mr Cowan's profile page on the Friends Reunited website, he had been "settled (for the time being) in Barcelona, living with Spanish girlfriend and working as a currency trader, in the sun".

Friends paid tribute to Mr Cowan online, with two, named Tere and Colin, saying: "We are very upset at his untimely and tragic death. He was a lovely person who cared deeply about his friends.

"His life here in Barcelona was not always perfect but he always had a big smile on his face and the strongest handshake ever.

"Our lives will be less without him. It is not fair and he will be missed greatly. We are grateful we knew him and can't believe we will never see him again."