A Libyan man remains in custody for questioning over a conspiracy to murder Pc Yvonne Fletcher more than 31 years after she was shot dead.
The suspect in his 50s was detained by counter-terrorism officers in south-east England in what police described as a "significant turning point" in the inquiry into the death of the officer, who was gunned down aged 25 during a protest outside the Libyan embassy in London in April 1984.
In addition to conspiracy to murder, the man was arrested on suspicion of money laundering.
Two other Libyan nationals, a woman in her 40s and a man in his 30s, also arrested on suspicion of money laundering in south east England and London respectively have been bailed until late January.
Searches continue being carried out at several locations around the country.
Detectives said the emphasis of the investigation has shifted to an alleged conspiracy, released dramatic footage of the aftermath of the shootings and disclosed they believe two guns were used.
Following the announcement, the officer's family made an emotional appeal for information, saying her father Tim died recently with his "one regret" that he had "never witnessed any justice".
Pc Fletcher was killed as she policed a demonstration against Colonel Muammar Gaddafi outside the Libyan People's Bureau in St James's Square on April 17 1984.
The shooting sparked a 10-day siege of the building before 30 of the occupants were deported back to Libya.
No one has ever been prosecuted over the killing. A reward of up to £50,000 is now being offered for information leading to the identification, arrest and prosecution of those responsible.
Police said the demise of Gaddafi, who died in 2011 during civil war in Libya, and the regime change that followed had "provided access to new lines of inquiry" and they were acting on fresh evidence.
British detectives have visited the country on seven occasions since 2012.
Scotland Yard refused to provide specific details of the arrests or how the money laundering and murder inquiries may be linked.
Investigators believe the incident was part of the so-called "stray dogs campaign" orchestrated from Libya to attack overseas dissidents and their interests at the time.
At about 10.17am on the day, a number of shots were fired from within the building, and the unarmed officer suffered a fatal shot to the back.
Commander Richard Walton, the head of the Met's counter terrorism command, said: "I can tell you today the we believe two firearms were used - a pistol and an automatic weapon."
Ten anti-Gaddafi protesters were also injured.
Scotland Yard released video footage showing the chaotic moments after the shots were fired.
Dozens of demonstrators fall to the ground before Pc Fletcher is seen stricken on the ground surrounded by colleagues.
Police appealed for those present on the day or others who have information to come forward.
"Allegiances change and we hope with the passage of time, witnesses who have not spoken to us will examine their consciences and come forward," said Mr Walton.
Images of 14 pro-Gaddafi demonstrators who were also gathered outside the building on the day and who police wish to trace have been released.
Mr Walton said: "There were a number of witnesses who were part of the pro-Gaddafi counter demonstration whom we have never spoken to.
"We appeal particularly to these people to come forward and speak to us now even after 31 years."