After Police previously expressed their desire to speak to the N-Dubz star after she was caught by an undercover reporter for The Sun trying to arrange the cocaine deal - said to be worth £800 - with her friend, rapper Mike GLC.
Confirming her arrest, Scotland Yard said in a statement to ITV: "Officers have today arrested two people, a 35-year-old man (A) and a 24-year-old woman (B), by appointment at a central London police station on suspicion of being concerned in the supply of class A drugs.
Tulisa has since been released on bail, with a Met Police spokesperson stating: "Both have now been bailed pending further inquiries to a date in late July. Searches have been completed at two residential addresses."
Police were seen leaving the 24-year old's Hertfordshire mansion carrying evidence bags after her arrest.
It has been reported that if she's found guilty, T could face life in prison and a fine for supply of drugs, or seven years behind bars and a fine for possession.
The former X Factor judge is yet to make an official statement regarding the episode, with a spokesperson for Tulisa declining to comment.
However, Mike GLC - who was arrested and bailed with T - has since spoken to press outside Belgravia police station, with The Mirror quoting him as saying: "We are innocent. We haven't been charged."
The rapper went on to add that any evidence caught on camera had been "taken out of context" and that himself and the Young singer were "set up".
He said: "Anyone can edit or chop things together on video. The truth will come out in the end. I don't want to go into much more detail.
"I am going home to be with my family. This is ruining my life. I am not a drug dealer. I have never sold drugs in my life."
I have to say the more I read and hear about this story the more It is beginning to sound like a set-up it is very true that recordings can be changed and I guess that the truth will come out in the end, however if this does happen to come out to be true it won't be very good for the stars image I hope for her sake it is not true.
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