The deaths of two British children in a Spanish hotel room took a further horrific twist today when their father appeared in a Carlisle court on unrelated charges of sexual assault and child rape.

Martin Smith, 45, who is from North Shields, Tyne and Wear, had been on the run from British police for two and half years before he was extradited from Barcelona on Tuesday.

That same day his wife, Lianne, 43, led police to a hotel room in the resort town of Lloret de Mar, in north-eastern Spain, to show them the corpses of her children. Later in the day, she was arrested on suspicion of murdering them.

Autopsies are expected to be conducted tomorrow on Rebecca, five, and 11-month-old Daniel. Their father had been arrested 11 days earlier at outside an apartment block near Barcelona's Sagrada Família cathedral, where neighbours said the family had been living for the past six months.

Smith was extradited to the UK on Tuesday and was remanded in custody after his appearance before Carlisle magistrates this charged with 13 sexual offences. It is understood he was told about the deaths of the children overnight by Cumbria police.

The unrelated charges against him include rape, gross indecency, indecent assault and attempted rape of girls under 16. The alleged attacks took place between 30 April 1995 and 29 April 2005.

A police spokesman said: "Martin Smith, 45, was brought back to the UK yesterday and appeared at Carlisle magistrates court this morning to face 13 charges of sexual offences and for failing to answer police bail. An application was made in court for him to be remanded in custody.

"During the court hearing it was disclosed that Spanish police have informed Cumbria constabulary that Martin Smith's wife, 43-year-old Lianne Smith, has been arrested on suspicion of the murder of his two children, Rebecca, five, and Daniel, 11 months, in Spain."

Martin Smith will next appear before Carlisle crown court on 7 June.

Spanish officials suggested that his arrest and extradition may had triggered the awful events that unfolded at the Miramar hotel in Lloret de Mar.

"The difficult situation the mother was living through may have set in train the events that led to a possible crime," the Catalan justice minister, Montserrat Tura, said today, after expressing her shock at the deaths of the two children.

Lianne Smith was being held at the police station in Blanes, near Lloret de Mar, to night and is due to appear before a magistrate this week. Spanish media said psychological assessments were to be taken.

The bodies of the two children were at a morgue in the nearby city of Girona. Spanish media reported that forensic scientists would also look for evidence of sexual abuse, though police said neither parent was wanted on abuse charges in Spain.

Guests at the seafront hotel where the corpses were discovered described their shock at what had happened.

Andres Sonajalg, 49, from Tallinn, Estonia, said he had seen Lianne Smith at breakfast. "I went out in the morning and when I came back the hotel was surrounded by police and ambulance teams," he said. "It was terrible. My wife and I were really sorry we couldn't do anything to help her and the kids, but we didn't know anything was wrong."

Police sealed the family's sixth-floor apartment in Barcelona late on Tuesday with three large stickers bearing the logo of the regional Catalan government.

Lianne Smith's name remained on the post box downstairs in the foyer and the apartment blinds were half-drawn.

Neighbours were unable to say where the family had lived before.

The family had left Britain in December 2007. A post on the Help Find My Child website said the couple and their elder child had gone missing from Lichfield, Staffordshire, and were believed to have left the country via Dover.

"They had very little to do with the neighbours," said neighbour Elia Sanchez. "I had seen her come in with her child in a pushchair, but they pretty much kept to themselves. She seemed pleasant enough and was caring with the children whenever I saw her."

The news agent next door said she had sometimes come in to shop with her daughter. "She spoke very little Spanish. She occasionally bought little toys for her children," he said.

"She didn't speak much Spanish so we never got into a real conversation," said another shopkeeper. "But she always seemed happy. She'd buy her daughter colouring books and stickers and always leave with a smile on her face and a polite 'goodbye'."

Another Barcelona restaurant owner said that he had helped police find Martin Smith, who had featured in a campaign seeking suspects who had left the UK for Spain.

"The police came in here when they were looking for the British man," he said. "They showed me a photo and I recognised him as someone who came to eat here from time to time. He must have been in about four or five times in the last few months."

"He didn't say much but his face immediately rang a bell with me when I saw the photo and I told the police I thought he probably lived locally," he said. "They came back afterwards to say they'd found him and thank me for my help."

The couple were said by former neighbours to have lived at a house in Lichfield for no more than six months in the latter part of 2007.

An elderly woman, who declined to give her name, said: "You didn't hardly see them at all – we didn't even know they had gone when they left."