The Post understands Sadie Graham was one of two people arrested by Notts Police officers on Thursday.
A BNP spokesman has said he expects more arrests to be made in connection with the unauthorised publication of the list last month.
Simon Darby, press officer and member of the BNP, said: "News of the arrests was good because right from the onset we were under the impression that the police were taking it very seriously and were going to do something about it.
"I'm pleased because this is just the start. We expect other arrests as well.
"What people don't understand is that anybody that has been using the list, even newspapers, have been committing a criminal offence."
He added: "It is a shocking thing to do to publish the list.
"It's caused a lot of needless worry, anxiety and upset.
"We have had our privacy violated and published everywhere. We want justice for our members."
A police car with an officer inside was parked outside Ms Graham's home in Church Lane, Brinsley, last night.
Police were today sifting through boxes of evidence seized from her home.
Officers packed the boxes from Graham's terraced house into unmarked cars before leaving with a woman.
Coun Graham, now an independent nationalist at Broxtowe Borough Council, was dropped from the BNP in December last year.
A spokeswoman for Dyfed Powys Police said: "We can confirm that Notts Police arrested two people as part of a joint investigation with Dyfed Powys Police and the Information Commissioner's Office in conjunction with alleged criminal offences under the Data Protection Act. The arrests followed an investigation into a complaint received about the unauthorised release of the BNP party membership list."
The spokeswoman added that an army bomb disposal team was called to the address in Brinsley after a suspicious item was found. But the item was declared safe, with no further reaction required.
Dyfed Powys Police said today the two people arrested were granted police bail "pending further investigations" and were released last night.
Officers from Dyfed Powys Police and the Information Commissioner's officer are continuing the investigation.
The BNP membership list was published on an internet blog last month and was removed after complaints from the party. It featured more than 12,000 names including addresses, jobs and contact details.
The party has obtained an injunction banning the publication of the list. Coun Graham was unavailable for comment.
Sadie Graham, 29, a former councillor for the party, was one of two people held in connection with offences under the Data Protection Act.
The arrests at Ms Graham’s home came on Thursday as part of an investigation by the Information Commissioner’s office and the police.
Last month’s release of the party’s 13,500-strong membership list caused an uproar after thousands of people were identified as supporters of the far Right group, including serving police officers, members of the Armed Forces and even staff at Buckingham Palace.
Many were left fearing for their jobs and safety after the names of members were posted on the internet. Two weeks ago a car in West Yorkshire was fire-bombed. The name of a 26-year-old man who lived nearby was on the list, although he left the party last year.
It is believed that the second arrest was of Ms Graham’s husband of two months, Matthew Single, the BNP’s former head of security.
Ms Graham, a mother of one, and her husband were previously involved in a revolt at the top of the party which led to 60 members resigning last year.
The pair were accused of attempting to overthrow leader Nick Griffin while setting up an ‘anti-BNP smear blog’ attacking the failures of the party to progress electorally.
Following Ms Graham and Mr Single’s subsequent expulsion from the party, Nick Griffin obtained an injunction in April last year banning publication of a list of its members.
Ms Graham, a Nottingham University graduate, was named on the injunction along with her now husband and four other defendants including the party’s former head of administration Kenny Smith. The others named were Nicholla Smith, Stephen Blake and Ian Dawson.
On Friday police officers were seen taking boxes from Ms Graham’s and Mr Single’s terraced home in Brinsley, Nottinghamshire.
Ms Graham has already been targeted on the internet for her alleged leaking of the membership list. On YouTube a selection of pictures of her and allegations are displayed in a video to The Beatles song Sexy Sadie.
Ms Graham, now an independent councillor, used to be the BNP’s regional organiser for the East Midlands.
A police spokeswoman said: ‘Two people have been interviewed in conjunction with alleged criminal offences under the Data Protection Act relating to the complaint from the BNP about the release of their party membership list. They have now been bailed pending further investigations.’