Corruption investigation:The Portsmouth manager Harry Redknapp believes that his arrest on suspicion of corruption has ruined his chances of getting the England head coach's job, as it emerged that his former superior at the club, Milan Mandaric, was detained by police on suspicion of money laundering.

Mandaric, now owner of Leicester City, was among five men with connections to Portsmouth FC, where he was formerly chairman, to be arrested on Wednesday. The five were questioned over an alleged conspiracy to defraud and false accounting but only the 69-year-old Mandaric was quizzed about money laundering.

"One of the five, a 69-year-old, was arrested on an additional charge of money laundering," said a spokeswoman for City of London police's economic crimes unit, which is leading the investigation.

The others to have been arrested were Portsmouth's current manager, Harry Redknapp, the club's chief executive, Peter Storrie, Amdy Faye, a former player, and the midfielder's agent, Willie McKay. All have been bailed until February.

Mandaric yesterday declared his innocence. "I am confident the truth will prevail and we will not be charged," he said. "Harry is a dear friend of mine and we will be doing all we can to co-operate with police in this investigation."

The Portsmouth manager called a press briefing yesterday after training to reiterate he had "nothing whatsoever" to do with the matters under investigation. In an emotional address, he added that his wife had been "petrified" when officers raided the family home in Sandbanks, Poole, early on Wednesday morning while Redknapp was returning from Rangers' Champions League tie in Stuttgart.

Redknapp acknowledged any chance he had of a role with the national side has vanished. A source close to the 60-year-old admitted he now accepted the Football Association "wouldn't touch him with a barge pole", with Redknapp infuriated at what he perceives to be a "witch-hunt" against him.

"I still feel I was only called into this because I was high-profile," he said. "I added a bit of profile to the investigation because, really and truly, this has absolutely nothing to do with me. The whole crux of this was that the police wanted to discuss with me and Peter the fact that an agent had been paid an agent's fee and he'd allegedly paid some of the money to his player. There were no other issues for me to talk about.

"It's not in my field to be involved in who receives what, what agents' fees are paid or not paid at this football club. What the agent actually does with his player is none of our business. This club is completely transparent, is totally honest. There's nothing goes on at this club that shouldn't, that we're afraid of."

Police confiscated a computer from Redknapp's home and he reported to Chichester police station.

He spent much of yesterday afternoon in dialogue with his lawyer at Portsmouth's training ground. "Why I couldn't just have had a phone call asking me to pop down to the police station for a chat about this, I really don't know," he said. "I was particularly disappointed that the police should come knocking on my door at six o'clock in the morning with photographers from a well-known tabloid newspaper.

"They searched my house and took away a computer that I bought my wife two years ago for Christmas. I think she learned to turn it on four weeks ago. There's absolutely nothing on it. If you can tell me that's the way to treat anybody - well, I'm afraid, that's not the society I was brought up in."

Redknapp had indicated a willingness to answer questions only to leave when the first query put to him mentioned last year's BBC Panorama documentary investigating corruption in the game. He denied any wrongdoing.