Caruana Galizia's sons Matthew and Paul
© AFP Photo/Tolga AKMEN
Caruana Galizia's sons Matthew and Paul at a vigil in London hoping for justice for their journalist mother
Malta on Wednesday arrested a tycoon in connection with the murder of journalist Daphne Caruana Galizia, the day after an alleged middleman was offered a pardon to identify the mastermind behind the killing.

Maltese national Yorgen Fenech was detained on his yacht at dawn as he tried to leave Malta, a police source told AFP, in the latest development in the long-running case that has raised questions about the rule of law in Malta.

Before her 2017 murder, which sparked outrage and protests in the Mediterranean island, Caruana Galizia reported on corruption -- including alleging that a company owned by Fenech was connected to high-level politicians.

Her son Andrew said on Twitter that Prime Minister Joseph Muscat "has blood on his hands" for protecting those involved.

Parliament was adjourned Wednesday following a walkout by opposition lawmakers after Muscat refused to sack officials allegedly implicated in the case.

Several hundred people protested outside Muscat's office in Valetta, waving photos of the murdered blogger and calling on the prime minister to resign.

"This is not the Malta I know and not the Malta I want my children to be brought up in," said protester Donna Portelli. "I'm sick of this place."

The crowd later prevented Justice Minister Owen Bonnici's car driving away from parliament, banging on the windows and shouting: "Mafia! Mafia!"

The murdered journalist's family called Wednesday for tourism minister Konrad Mizzi and the prime minister's chief of staff Keith Schembri to resign over alleged planned payments from Fenech's company.

Fenech, who is from a wealthy family with sprawling business from energy to hotels, was intercepted just after 5:30 am local time (0430 GMT), and his sleek white and blue yacht Gio was accompanied back to port.

Police said Fenech was "a person of interest" in the case.

On Tuesday, Muscat had said he had promised a pardon if an alleged middleman arrested last week named the person who ordered the attack.

- 'Mafia island' -

Caruana Galizia, described by supporters as a "one-woman WikiLeaks", had highlighted corruption in Malta before she was blown up by a car bomb.

Three men are facing trial for allegedly carrying out the brutal killing, but the mastermind has not yet been identified.

The 53-year-old blogger left behind a husband and three sons, who have accused Muscat of filling his office with crooks and creating a culture of impunity that turned Malta into a "mafia island".

Her sons said in a Wednesday statement that Fenech's arrest was "an overdue and important development" in the case.

"We now expect the authorities to continue investigating the links our mother uncovered between Fenech and the prime minister's chief of staff and minister Konrad Mizzi," the family said.

Fenech is the director and co-owner of Electrogas, which won a multi-million euro contract from the Maltese state in 2013 to build a new gas power station.

He was also director of one of the country's most powerful businesses, the Tumas Group, which runs among other things the Hilton Malta and Portomaso Casino.

But in company documents seen by AFP, Fenech resigned the post last week and was replaced by his brother Franco.

A leaked Malta Financial Intelligence Analysis Unit (FIAU) report identified Fenech as the owner of a company in Dubai called 17 Black.

Caruana Galizia had written in her blog about 17 Black some eight months before her death, alleging it had connections to Maltese politicians.

- 'Mother would still be alive' -

Much of her work had been centred on what the huge Panama Papers data leak unveiled about corruption at the highest levels in Malta.

Leaked emails revealed in court appeared to show that Panama companies owned by then-energy minister Mizzi and chief of staff Schembri stood to receive payments from 17 Black.

If Muscat had not protected Mizzi and Schembri, "my mother would still be alive", Caruana Galizia's son Andrew tweeted, calling for both to resign.

The prime minister said Wednesday there was no evidence he knew of linking politicians to the murder, and insisted that his order for police to increase surveillance had prevented Fenech's "potential escape".

After repeatedly refusing to open a public inquiry into the killing, Malta made a surprise U-turn in September, appointing a retired judge to head a probe.