"Very disturbing news. The Freedom Party is suspending all public activities until all facts in connection with the investigation are known," Wilders said on Twitter, as Dutch political parties gear up for a crunch election on March 15.
The firebrand MP, who has courted controversy with his hardline anti-Islam, anti-immigrant stance and his incendiary insults against Moroccans and Turks, has long been under 24-hour police protection.
Tensions are escalating ahead of the election in which the Freedom Party is running neck-and-neck with the Liberals of Prime Minister Mark Rutte.
On Saturday, Wilders upped the tone at the launch of his official campaign, denouncing "a lot of Moroccan scum who make the streets unsafe".
The highly-respected NRC daily newspaper reported Wednesday that the agent was arrested for allegedly passing on information about Wilders to a Moroccan crime gang.
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Dutch police chief Erik Akkerboom confirmed an investigation had been opened but that Wilders' safety "was never in question".
However the matter was deemed so serious that Rutte, who is now campaigning for his own Liberal VVD party met Wilders to discuss the issue.
The suspected agent was released on Thursday pending the investigation, Dutch news agency ANP said.
Netherlands is no stranger to political violence, even though the small country of just 17 million people has largely gained a reputation for tolerance.
Flamboyant far-right leader Pim Fortuyn was assassinated just nine days before Dutch elections in 2002, shocking the country to the core.
Just two years later in November 2004, filmmaker Theo van Gogh was murdered by a Muslim radical.
Wilders, 53, has vowed in his party's one-page manifesto that if elected he would ban the sale of Korans, close mosques and Islamic schools, shut Dutch borders and ban Muslim migrants.
