Home Secretary Theresa May confirmed that Sheik Raed Salah was in custody and arrangements were being made to deport him, the BBC reported Wednesday.
She said there would be a full investigation into how Salah was able to enter Britain.
Salah's solicitor said his client had "no knowledge" of an alleged travel ban and made no attempt to hide his identity when he entered Britain.
Salah is the head of the northern branch of the Islamic Movement in Israel.
A spokesperson for the movement told the Israeli news organization Haaretz Salah was arrested Tuesday evening at a hotel where he was staying after a speech in the city of Leicester.
"There is no legal or lawful reason for his arrest," Zahi Nujeidat said. "We are following the developments in the coming hours, and have sent a lawyer to represent the sheik."