The capture of Ante Gotovina, a former Croatian general who is accused of killing 150 Serbs and expelling up to 200,000 others, was hailed as a big step towards reconciliation after the Balkan civil wars and a boost to Croatia’s international credibility.

Mr Gotovina, 50, had command of Croatian forces in 1995 during what was known as Operation Storm, when thousands of Serbs were forced to flee their homes and seek refuge in Bosnia and Serbia-Montenegro. He was indicted in 2001 and was the third most-wanted suspected war criminal from the Balkans, after the Serb leaders Radovan Karadzic and Ratko Mladic.

After a global manhunt and reported sightings in Italy, Ireland, Bosnia and South Africa, Mr Gotovina was finally caught as he dined in a luxury hotel in the tourist resort of Playa de las Américas. The arrest was said to have taken a few seconds.

A Spanish official read out the warrant which said that Mr Gotovina had "planned, instigated and ordered acts such as persecution, murder, displacements of people, plundering of private and public goods, destruction of goods, deportations, pillaging and destruction of cities, towns and villages without motive".

Officials said that Mr Gotovina was carrying a false Croatian passport in the name of Kristian Horouat, as well as €12,000 (£8,100) in cash. He is reported to have checked in at the hotel with a friend five days ago.

After his arrest, Mr Gotovina was flown to a military base near Madrid and brought before a judge. Looking tanned and wearing jeans, a white shirt and a blue jacket, he was accompanied at the hearing by a Croatian consular official and a court-appointed lawyer. He made no comment as the charges were read out.

Nato foreign ministers meeting in Brussels broke into spontaneous applause when the arrest was announced. Jaap de Hoop Scheffer, the Secretary-General, said: "This is good news for the world."

In Zagreb, though, several hundred supporters protested his arrest last night, accusing their Government of betrayal.

The failure to arrest Mr Gotovina, who is seen by many as a national hero, had developed into an international scandal that delayed by seven months the start of Croatia’s EU entry talks.

The Government was accused of harbouring him — or at least doing nothing to find him — and European governments refused to consider entry talks until the UN’s chief war crimes prosecutor was satisfied that it was co-operating fully. Croatia insisted that he had fled the country, but this claim was greeted with scepticism.

Yesterday Ivo Sanader, the Croatian Prime Minister, declared that he had been vindicated. "Those who believed us when we were saying that Gotovina was not in Croatia today received the final and complete confirmation," he said.

The capture of Mr Gotovina is likely to hasten the country’s entry into the EU. A spokesman for the British presidency said: "This removes an important obstacle."

His arrest also increases the pressure on Serbia to catch Dr Karadzic and General Mladic, who are accused of genocide.