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Police have been trying to find the singer, whose real name is Paul Gadd, since he fled his rented home in the coastal resort of Vung Tau a week ago. This followed allegations that he had been living with two teenage girls.
Vietnamese authorities have interviewed a 15-year-old girl at the resort as part of a criminal investigation in which Gadd is wanted on suspicion of obscene acts with a child. Gadd, 61, has now been taken back to the town for questioning. He had been living there in a beach house since March.
He was detained at the airport in Ho Chi Minh City after an official recognised his name from a newspaper article.
Reports said Gadd had been banned from a nightclub after Alan Davis, its owner, accused him of targeting teenage waitresses. Police were then alerted to his living arrangements.
Last week the Vietnamese foreign ministry said Gadd had applied for permanent resident status. It is understood that if his past convictions are confirmed he will not be permitted to stay. If convicted of the latest allegations he faces 12 years in jail.
In 1999 he was sentenced to four months in prison in Britain after repair technicians found child pornography images on his computer. On his release he fled to Cuba and then to Cambodia but was expelled in 2002. It is understood he has been in Vietnam for about a year.
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