Police held the 40-year-old British citizen, named locally as Kainth Devinder.
He has been charged with suspicion of homicide after attacking Sandro Rottman, at The Spinnaker in Sotogrande on Spain’s Costa del Sol on Saturday night.
Authorities said the victim, 43, had been charged with possession of child pornography days before, although it is not known if the Briton was aware of that.
A spokeswoman for the Civil Guard said: “The discussion apparently began because of alleged recordings that the victim was making of the aggressor’s daughter.
“When he (the aggressor) saw what was happening he took the tablet off him, saw the recordings, threw the device to the ground and attacked him.
“The victim had been arrested by the Civil Guard a few days ago for possession of child pornography.”
Police said that when they arrived they found the victim with “very serious” wounds, although it is understood no weapons were used during the attack.
He was taken to a hospital in nearby La Linea de la Concepcion but later died there.
Several reports suggested the victim died from a single punch to the face.
The British man, who is understood to live in Sotogrande, left the restaurant after the assault but was later identified thanks to witnesses, police said.
He was arrested at his home where he lives with his wife and two daughters.
He was in police custody on suspicion of homicide and was waiting to go before a magistrate.
A source said his young daughter is under the age of eight.
The victim had been arrested in Spain in January over child pornography claims and was awaiting trial.
A postmortem examination has been carried out and authorities are awaiting results to determine how the victim died.
The arrested man is understood to have appeared yesterday before a magistrate.
Britain’s Foreign Office spokeswoman said: “We are urgently investigating reports of the arrest of a British national in the Cadiz area in southern Spain. “We stand ready to provide consular assistance if requested.”