A Nepali army officer is due to appear at Westminster Magistrates' Court charged with two counts of torture.
Kumar Lama, 46, of St Peters Road, St Leonards-on-Sea, is accused of inflicting severe pain or suffering when he was acting in an official capacity.
The offences are alleged to have taken place between April 15 2005 and May 1 2005, and April 15 2005 and October 31 2005 at the Gorusinghe Army Barracks, Kapilvastu, Nepal.
These time periods fall within the Himalayan's nation's decade-long Maoist insurgency.
The government of Nepal summoned the British ambassador in Kathmandu to protest over the officer's arrest.
Deputy prime minister Narayankaji Shrestha told reporters that the government had demanded the immediate release of Col Lama, while Nepal also instructed its embassy in London to submit a protest note to the British government.
Nepali officials said Col Lama is serving as a military observer under the UN Mission in Southern Sudan and was on a holiday in London.
Scotland Yard said the arrest did not take place at the request of Nepali authorities.