The England international was spotted on a night out in Yarm, near Middlesbrough on Saturday night, and was allegedly involved in a fracas at around 1am on Sunday morning.
Reports in The Daily Mail indicate that he hit his former partner in an argument in the Cross Keys club, and was later picked up by police.
Local authorities have confirmed that an arrest has been made, but would not release the name of the man in question.
“Police were called to an incident at a pub on Yarm High Street,” an official police statement reads.
“A 27-year-old man has been arrested on suspicion of assault and a 32-year-old woman has also been arrested on suspicion of assault.
“Both are in custody and inquiries are ongoing,” it concluded.
The scandal is the last thing that the Anfield club need after the recent controversy over Luis Suarez and new racism claims in the Merseysiders 5-1 win over Oldham in the FA Cup on Friday night.
Downing has struggled to make an impact at Kenny Dalglish’s side since an £18 million move from Aston Villa in the summer.
By Gareth McKnight