The prosecutor's office had first announced on Friday that it had launched a probe into the alleged theft from the NGO by a member of staff.

A person has since handed themselves into the Luxembourg police for interrogation, the prosecutor's office said in a statement on Monday, adding that the person was then arrested. The person is presumed innocent until proven guilty, the office said.

At the time of the alleged theft, Caritas had around €28 million in its accounts, the NGO's director Marc Crochet told broadcaster RTL on Monday morning, including €3 million in donations.

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The proposal had the approval of the Institute for the Works of Religion's board and was put forward by its president.

Having this type of investment fund would have helped IOR managers manage a portion of the Institute's deposits.

Pope Francis's Council of Cardinals referred to the proposal to the pontiff for a decision.

But setting up an investment fund in Luxembourg may have made the controls and checks process for the IOR more complex.

Francis has, since the start of his pontificate, opposed suggestions the IOR behave like an investment bank.

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