John Darwin, a former teacher and prison officer, was declared dead in 2003, a year after his canoe was found wrecked in the north of England.
However, the 57-year-old walked into a London police station at the weekend, claiming that he was unable to remember where he had been, and telling police: "I think I may be a missing person."
His wife Anne, 55, who received a life insurance payment for her husband's 'death,' moved to Panama six weeks ago.
Darwin was arrested at his home in the early hours of Wednesday. The arrest was believed to be connected to a photo published in the Daily Mirror tabloid showing a suntanned Darwin and his wife in Panama in 2006.
Anne Darwin had claimed she had not seen her husband since his disappearance.
When confronted by the newspaper, Anne Darwin said, "Yes, that's him. My sons will never forgive me. They knew nothing. They thought John was dead. Now they are going to hate me."
"I knew he was going back [to the U.K.]. But I didn't know he was going to the police... I don't suppose the police will believe anything I tell them. It looks pretty damning. I'm not sure if there's much more I can say."
The manager of the real estate agency in Panama where the photo was taken told the newspaper: "I remember posing with them for that picture, they were quite happy to be pictured and knew it was going on the website."
"It's breathtaking to think they were happy to have their picture on the site when they knew they might get caught."
Police said on Thursday that they may want to question the one-time 'widow' sometime soon. However, Anne Darwin is currently in Panama, and is unable to return to Britain immediately due to "visa problems."
