Mexican authorities have arrested a fugitive former deputy police chief wanted in connection with the disappearance of 43 students last year, officials say.

Francisco Salgado Valladares, the former deputy director of Iguala's municipal force, was detained by federal police officers, two security officials said on condition of anonymity.

Local media said Salgado, who was one of the most wanted fugitives in the case, was captured in Cuernavaca near the capital Mexico City.

Prosecutors allege Iguala's gang-linked mayor ordered police to intercept the students on September 26 over fears that the aspiring teachers, known for their regular protests, were in town to disrupt a speech by his wife.

The officers rounded up 43 students handed them over to the Guerreros Unidos drug gang, which slaughtered the young men and incinerated their bodies, according to prosecutors.

The interior ministry said Salgado received around $US39,00 ($49,500) per month to provide protection to the gang.

Around 100 people have been detained in the case, including several municipal officers, gang suspects, and Iguala's mayor Jose Luis Abarca and his wife.

The city's top security official, Felipe Flores Velazquez, remains in hiding in a case that has sparked protests against president Enrique Pena Nieto's administration.

Parents of the victims have accused the government of attempting to prematurely close the case.

AFP