Merseyside Police confirmed that a 17-year-old boy, from the village of Banks, about five miles away from Southport, had been arrested and was being questioned on suspicion of murder and attempted murder.
The youth, who cannot be named for legal reasons and is originally from Cardiff, moved to the Southport area with his Rwandan parents when he was aged six.
In a press conference, Chief Constable Serena Kennedy, of Merseyside Police, said that while the incident was not being treated as terror-related, colleagues from counter-terror policing had offered to assist with the investigation.
Two children were killed and nine others were stabbed on Monday when a hooded man launched a knife attack in a Taylor Swift-themed dance class.
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Witnesses described how just after 11.45am, the attacker allegedly pulled up at the dance studio, which is situated in a small business centre behind a residential street, in a taxi and then got out without paying.
One witness claimed he had a black hooded top pulled up and was wearing a Covid-style face mask. He walked into the studio through the front door, which was unlocked for fire safety reasons.