The owner of the floating restaurant which sank in Bahrain claiming 58 lives, among them 15 Britons, was arrested today, a spokesman for the Bahrain's chief prosecutor's office said tonight.

The Bahraini, who has been questioned over why his converted dhow, the Al Dana, put to sea last Thursday eveing without being properly licensed, has been arrested for seven days while an investigation into the disaster is carried out.

The boat's Indian captain, who prosecutors say was not properly licensed to pilot the craft, has been arrested and is still in custody.

The 80ft-long traditional sailing vessel, which had been converted into a restaurant, was first registered in Qatar and arrived in Bahrain last December.According to Bahraini officials, its owner, who runs a family business, then registered it to be in Bahrain. It was surveyed and he was given a list of requirements the vessel had to meet before it could be given a safety certificate for carrying passengers. The process was not completed and the boat went to sea without having been given the all-clear, according to the Bahraini interior ministry.

The Al Dana had been operating pleasure cruises for less than a month. Ivor Vaz, who went on the inaugural cruise on March 9, said the boat had seemed unstable then with only 60 people on board. There were 130 on board when it capsized.

Mr Vaz said: "As the wind got up and we got further out, the boat wasn’t really balanced. We were sitting down having dinner and they told us to get up and move from one side to the other to balance it. When I heard how many were on board I thought it must have been a ferry that had sunk. I couldn’t believe it when I found out it was this dhow."

Bahrain has suspended all tour boat operations and is requiring each boat to be re-inspected by the coastguard before it can resume tours.

Many of those who died had been working on the partially constructed Bahrain World Trade Centre twin towers. Work on the 50-storey skyscrapers started again today, having been suspended after the disaster.

Peter Adams, the managing director of construction firm Murray & Roberts, which lost some of its most senior British staff, said: "The project site was closed immediately after the tragedy. All our staff and our sub-contractors are still in a state of shock.

"We plan to reopen the site gradually from today and we have brought in some senior staff from Dubai to take over the supervision. It will be extremely difficult to replace some of the highly experienced managers who fell victim to this tragedy."

Families of the Britons who died attended a memorial service at the Bahrain Rugby Club last night. Five members of a touch rugby side called the Reds, which plays at the club every week, were among the dead.

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