Federal prosecutors in Miami have charged Andrew Fahie and two others with cocaine trafficking and money laundering conspiracies, the US Justice Department has said.

On Friday, UK Foreign Secretary Liz Truss confirmed the 51-year-old had been arrested in the United States.

Ms Truss said she was "appalled" by the allegations and an "emergency meeting of the territory's cabinet" was due to be held on Friday.

Fahie was held as part of an operation led by the US Drug Enforcement Administration (DEA), a statement released by British Virgin Islands (BVI) governor John Rankin at the time said.

It was reported by the Miami Herald that he had been arrested at an airport after DEA agents posed as members of a Mexican cartel.

It comes as an inquiry - not linked to Fahie's charges or his initial arrest - concluded the BVI should have its constitution suspended, elected government dissolved and effectively be returned to direct rule from London.

Mr Rankin ordered the report to be carried out to investigate "corruption, abuse of office and other serious dishonesty" within the British overseas territory's governance.

He explained that British judge, Gary Hickinbottom, who led the inquiry, had concluded that "drastic and urgent steps" needed to be taken to stop elected officials from "deliberately ignoring the tenets of good governance".

If London accepts the recommendation, Mr Rankin - a career British diplomat - would take over the day-to-day running of the BVI.