* Premier held on suspicion of theft, misuse of credit card
* Caymans are home to most of the world's hedge funds
By Shurna Robbins
GEORGE TOWN, Cayman Islands, Dec 11 (Reuters) - The leader of the Cayman Islands was arrested on Tuesday on suspicion of corruption in connection with a graft investigation in the Caribbean offshore financial center, authorities said.
Premier McKeeva Bush was detained at his home by members of the Financial Crime Unit of the Royal Cayman Islands Police Service, a police statement said.
The 57-year-old premier is suspected of theft, alleged misuse of a government credit card and abuse of office over the alleged importation of explosive substances without valid permits, it said.
"It would be inappropriate ... to make any further comment in relation to these matters at this time," the statement said. "Further updates will be made available in due course."
A police spokeswoman declined to elaborate on the arrest.
Leonard Dilbert, Bush's chief of staff, said the premier had been detained on suspicion of wrongdoing pending an investigation but had not been formally charged with any crime.
"It is important to remind the people of the Cayman Islands not to rush to judgment," he said. "Being suspected of having done something is far from it having been proven that you did that thing."
Bush was elected in 2009 as premier of the island chain, a British Overseas Territory with a population of 55,000 people and a leading global tax haven.
The islands are home to most of the world's hedge funds, offering tax advantages and financial secrecy to companies and investors.
Bush also holds the position of minister of finance and tourism. He is the longest-serving member of the Caymans' Legislative Assembly and was first elected in 1984.
Police searched Bush's home after his arrest and set up roadblocks restricting access to his residence, said a government official who requested anonymity because the investigation is still ongoing.
Earlier this year, Cayman Islands Police Commissioner David Baines said Bush was the subject of three police investigations, two of them involving what he described at the time as financial irregularities.
Bush publicly denied any wrongdoing.
Officials from Bush's United Democratic Party are examining the impact of his arrest on the government, according to a statement from Deputy Premier Julianna O'Connor-Connolly.
"We the government understand the gravity of this matter," she said.
Alden McLaughlin, an opposition leader from the People's Progressive Movement party, said Bush's arrest had opened "a period of uncertainty."
"The arrest of the premier is a hugely damaging body blow to the reputation of these islands and to confidence in our government," he said in a statement.