Marumalarchi Dravida Munnetra Kazhagam general secretary V Gopal Swamy alias Vaiko was arrested, along with over 100 party workers, near Amaravathy in Tamil Nadu while he was on his way to Kerala on Friday.
Vaiko was leading party workers to check whether the Kerala government was constructing a dam across the Pamba river.
Water from the Pamba dam is used to irrigate thousands of acres of land in Tamil Nadu.
Vaiko, however, claimed that the construction of the dam will deprive water to thousands of farmers in Tamil Nadu's Tirupur district.
He said if Kerala continues with its efforts to construct the dam, the MDMK would block supply of essential commodities to Kerala from Tamil Nadu.
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