The man in question, Raymond Hewlett, 64, was reportedly living less than an hour away from the resort of Praia da Luz when three-year-old Madeleine went missing in May 2007, The Sun newspaper said.

According to news.com.au, Hewlett closely resembled an artist's impression of a man seen near the McCanns' holiday apartment.

He was originally given an alibi by a 15-year-old girl at the time of Madeleine's disappearance, but has since "made bizarre comments about the case to his friends and family", according to The Sun.

He also allegedly told a British couple holidaying in Praia da Luz that "gypsies" had offered him money to sell one of his own six kids.

Hewlett was jailed for a year after raping a 12-year-old girl in 1972, then got four years for attacking another girl at gunpoint in 1978. He later served a six-year sentence for a 1988 sex attack on a girl of 14.

He is currently in Germany being treated for cancer.

A spokesman for Kate and Gerry McCann, who launched a global media search for their daughter, confirmed that Hewlett was "of interest" to British investigators working for the couple, reported news.com.au.

"We are aware of Raymond Hewlett and the claims that have been made about him in some newspapers," spokesman Clarence Mitchell said. "The investigators searching for Madeleine are currently looking into the circumstances surrounding these claims.

"Mr Hewlett is an individual of interest to the Madeleine investigation but I would stress it is just one line of inquiry. Beyond that I can't really go into any further operational detail," he said.