Shannon Matthews, the 9-year-old girl whose disappearance three weeks ago sparked one of the UK's biggest police searches, was found alive and well this afternoon.

Police discovered Shannon hidden in the base of a divan bed in a flat in Lidgate Gardens in Batley Carr – about a mile from her home in Dewsbury – after breaking down the door of the property.

West Yorkshire Police said that a 39-year-old man was arrested at the address on suspicion of abduction. He has not been identified, although there was speculation that he is one of Shannon's relatives.

Shannon was tonight still in custody under an emergency police protection order while officers attempt to establish what happened to her.

A neighbour, Christopher Heaps, said that he went out into the street after hearing police break down the door of the property at about12.30pm.

"About five minutes after that a policeman came out with a girl under his arms," Mr Heaps said. "I just said to the policeman, ’Is that Shannon?’, and he said, ’Yeah, this is Shannon’. She was calm and placid."

Mr Heaps said that a woman in the downstairs flat raised the alarm. "She said that she heard a child’s footsteps above and she knew that he hadn’t got any children, I think she called the police and they took it from there then," he said.

Asked about the man who occupied the flat, he replied: "I don't know much. He seems to be like a loner we don't see much of him really. I saw the man being dragged down the steps and handcuffed and put into a van. He was on his knees, more or less."

Shannon went missing in Dewsbury on February 19 after a school swimming trip. Her disappearance prompted West Yorkshire's biggest police operation since the hunt for the Yorkshire Ripper in the late 1970s.

Some 300 police officers were involved, as well as police sniffer dogs and mountain rescue teams, and more than 500 houses searched. Some 1,500 motorists were stopped for questioning during the inquiry.

Karen Matthews, Shannon's mother, was taken from her home by a police liaison officer shortly after 2pm. It was thought that she was being taken to see her daughter — possibly at a local hospital where the girl was taken for a check-up.

Leon Rose, Shannon's natural father, said that he was "over the moon" at the news and being reunited with his daugther would be "like winning the lottery".

Mr Rose told Sky News: “I did say on the news I wasn’t going to give up until she was found. I’ve kept going, and every day I went out there as much as I could.”

This week Mrs Matthews, 32, a mother of seven, said that she believed someone she knew had snatched her daughter to hurt her. But she said that she did not know who could have taken the shy youngster.

She said: "She got abducted. That’s all I can say."

Peter Brown, who lives in Shannon’s road, said that he was the first one to tell Karen Matthews that her daughter was alive. He said: "She just froze. She was in shock. Then her reaction was crying.

"After that, she had a phone call from the police liaison officer. They came to pick her up, Karen and Craig [Shannon's stepfather] both left the house together. We’re going to have a party tonight."

Some friends and relatives started celebrating immediately as word spread through Dewsbury that Shannon had been found.

Children returning from school to houses in Shannon’s road were crying and hugging each other. Callie Brown, 8, who is in Shannon’s class at school, said: "We all had to go into the hall for an assembly. I was crying my eyes out.

Shannon's aunt, Amanda Hyett, said: "I can't believe it — what an incredible relief."

Among those reacting to the news today was Clarence Mitchell, spokesman for Kate and Gerry McCann, who said: "If these reports are true it is excellent news that she is alive. I have told Gerry about this and he and Kate are very pleased.

"This of course gives them every encouragement to keep up the search for Madeleine. The fact that Shannon has been found shows gives Kate and Gerry great hope and it shows that it can happen, that Madeleine can be found."

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