Hewitt was taken to a London police station "in connection with a matter that happened last night (Wednesday)," public relations executive Max Clifford told The Associated Press, speaking on behalf of Hewitt's manager, Aroon Maharajh.
Clifford said Hewitt, 46, had been held over a "drugs-related matter" along with a woman, Alison Bell, a 37-year-old TV presenter.
Britain's domestic news agency, Press Association, said Bell is a former girlfriend of Prince Edward, Queen Elizabeth II's youngest son. It said she formed a close friendship with the prince in the early 1980s.
A spokesman for London's Metropolitan Police refused to confirm that Hewitt had been arrested. But he said officers arrested a 46-year-old man on suspicion of being in possession of a Class-A drug — a category that includes heroin and cocaine — at a London bar late Wednesday. He said a 37-year-old woman also was arrested on suspicion of supplying a Class-A drug.
A spokesman later added that the suspects had been held overnight and freed on bail Thursday. They were ordered to report to a London police station in September, but neither had been charged, he said.
Clifford said police were analyzing "a tiny amount of a substance" — reported by the press to be half a gram of cocaine.
Anyone convicted of possessing a Class-A drug faces a possible jail sentence of up to seven years, while someone convicted of supplying such a drug faces a maximum sentence of life in prison.
Diana acknowledged in a 1995 television interview that she had had an affair with Hewitt during her marriage to Prince Charles.
Hewitt, a former cavalry officer, was branded a "love rat" by the British press after publishing a book in which he discussed his relationship with the princess, who died in a car accident in 1997.
In December 2002, Hewitt was again the subject of unfavorable publicity when he said he would sell love letters the princess wrote to him during the 1991 Gulf War.
The Press Association said Hewitt was arrested after a customer at Cactus Blue — a trendy Mexican restaurant and bar in west London called police.