A statement from police said they arrested a man from a house in Nairobi on Friday night following a tip off from his former aides and the man was actually not Kabuga.

Police spokesman Eric Kiraithe said investigations have established that the suspected person is actually a Kenyan of Rwandese decent who has been pursuing his intellectual and professional pursuits legally.

"Police investigations have now established that the suspected person is actually a Kenyan of Rwandese decent and he has been pursuing his intellectual and professional pursuits legally," Kiraithe said.

"In the last three years he has traveled to several countries including Kigali in Rwanda and Berlin in Germany," he said.

Both the local and international media had reported on Saturday that Kabuga who remains at large and who is being sought over his involvement in the 1994 Rwandan genocide that left close to a million people dead had been arrested in Kenya.

The Kenyan police had trailed the suspect from the coastal city of Mombasa before arresting him in Nairobi. The Tanzanian-based International Criminal Tribunal for Rwanda believes Kabuga is hiding Kenya.

And following persistence claims, police had formed a special team to trace the runway suspect. The team was established two months ago and has been moving between Nairobi and Mombasa.

"We would further wish to inform the public that the Rwandese embassy in Kenya has also confirmed the identity of the suspect. The media is once again advised to confirm any information before disseminating the same," Kiraithe said.

Last month, the country's Director of Public Prosecutions (DPP) Keriako Tobiko said the government has identified a multi million shillings property in Nairobi owned by Kabuga who is wanted to answer charges of genocide in the east African nation.

Tobiko made the request to the High Court to freeze assets belonging to Kabuga. He said the property in the name of the fugitive and his wife had been located in the Kilimani area of Nairobi.

Tobiko told the court that proceeds from rental income are wired to Belgium's Banque De La Poste in the name of Kabuga's wife Mukazitoni Josephine.

The DPP said it is believed that the proceeds form these property is being used by Kabuga to evade capture and avoid justice.

Tobiko said Kabuga is using the proceeds from his property to evade justice. He told the court that the International Criminal Tribunal for Rwanda (ICTR), which indicted Kabuga in 1994, wrote a letter to the Attorney General Amos Wako requesting him to assist in bringing justice against Kabuga.

The Arusha-based International Criminal Tribunal for Rwanda (ICTR), which has been trying key suspects of the 1994 genocide which killed an estimated 800,000 Rwandans, has sought the final help of Kenyan authorities to arrest Kabuga.

The tribunal, which has been trying suspects linked to the 1994Rwanda genocide in Arusha, Tanzania, is under pressure to complete its work by December 2008 and all appeals by December 2010.

Kabuga is alleged to have been the main financial backer of the Hutu extremist militias who carried out the massacres.

The UN investigators have reportedly complained that lack of political support and waning police cooperation in Kenya is making the search for the missing mastermind much more complex as he (Kabuga) is believed to use his vast wealth to bribe his way.

Kenyan police have been circulating Kabuga's photographs and gave the names he is believed to have used in the past.

The police said he uses the names Faracean Kabuga, Idriss Sudi, Abachev Straton, Anathase Munyaruga, and Oliver Rukundakuvuga.

Kabuga is believed to frequent Europe and African countries such as Madagascar, Gabon and Kenya.

Some 800,000 Tutsis and moderate Hutus were murdered, mostly by machete or club, across Rwanda in less than 100 days starting in early April 1994.