The Mama Bear’s group, which runs 21 nurseries in the southwest, has had the two registrations suspended by Ofsted during the investigation.
The company said the alleged offences had no connection to the nurseries the 43-year-old worked at in Long Road and Queen Elizabeth Drive, Paignton.
Children were turned away following the closures on 11 January, with the doors set to re-open on 21 February.
A nursery spokesman said, ‘The Ofsted investigation is related to a police investigation concerning a former employee of the nursery. We are co-operating with Ofsted and the police on this matter.
‘We recognise the disruption caused to parents and their children and we are working closely with them to secure alternative childcare arrangements. We are urging Ofsted to report its findings as soon as possible.
‘The safeguarding of children is our first priority at all times.’
Ofsted said it was helping police with their enquiries.
Devon and Cornwall police said the suspect, of Paignton, is accused of possessing and distributing the images, and has been released on police bail until 5 May.
A spokesman said, ‘Whilst the offences for which the man has been arrested are not connected in any way to his position of employment, all necessary avenues of safeguarding and investigation are being considered.
‘The man has resigned from his position.’
- Anyone with concerns can contact police on 101 quoting EN/028104/15.
Torbay council said worried parents or carers can call 01803 208 659 for support and advice between 10am and 4pm Mon-Fri.