A Libyan man has been arrested over the murder of PC Yvonne Fletcher who was shot dead outside the Libyan Embassy in London in 1984.

The man, said by police to be in his 50s, was held in London on suspicion of conspiracy to murder and suspicion of money laundering.

Another man, in his 30s, and a woman in her 40s have been held in London and southeast England respectively in connection with the case on suspicion of money laundering.

The two were bailed to dates in late January next year, pending police inquiries.

Police said the arrests were made after officers acted on fresh evidence.

A senior officer revealed it had emerged that two weapons were used during the attack that left PC Fletcher dead - an automatic machine gun and a handgun.

A reward of £50,000 has been offered and a campaign for information using social media is being launched.

PC Fletcher was shot on 17 April 1984 when a gunman inside the embassy, which at the time was called the Libyan People's Bureau, opened fire with a submachine gun.

A protest against the rule of former Libyan dictator Muammar Gaddafi had been taking place outside at the time, together with a counter demonstration.

PC Fletcher had been one of a number of officers policing the demonstration and was one of 11 people hit by the gunfire. She died shortly afterwards in hospital.

Sky News Home Affairs Correspondent Mark White said: "This is a major development in a 31-year investigation into the shooting death of PC Yvonne Fletcher.

"Scotland Yard have never given up their efforts to try to trace those responsible.

"In addition to this 'significant development', there is an appeal being made - a video being released - showing a number of demonstrators - 14 in total - who were filmed outside the Libyan Embassy on the day that Yvonne Fletcher was killed, shortly before the shooting, outside that embassy."

Commander Richard Walton of the Met Police said: "The murder of Yvonne Fletcher 31 years ago was one of the saddest and darkest days in the history of British policing.

"The focus of our investigation now rests with a conspiracy to murder Yvonne, police officers and demonstrators.

"What we are appealing for is for those who were demonstrating in favour of Gaddafi at the time, who were Libyan students at the time, that we want to come forward.

"We are hoping that with the demise of Gaddafi, those men will come forward."