She said a man, described by police as in his 30s and Asian, walked into the cafe just after 8am with the suitcase and ordered a coffee. Dressed in boardshorts and a yellow singlet, he looked fit for the beach and anxiously chatted to another couple.

"The owners said he was quite nervous when he sat down," said the dentist worker. "Then he just got up and left."

A 49-year-old man matching the description given by police was being held in hospital under police guard last night awaiting questioning. He was arrested in Ashfield yesterday afternoon and taken to Burwood police station where a pre-existing medical condition flared up, a police spokesman said.

One bystander reported that there was possibly "$1 million" in the case. Police would not confirm how much was in the suitcase – they were still counting last night – but that it was "a significant sum".

"Local detectives have commenced inquiries to determine who the money belongs to," a spokeswoman said.