Izaskun Lesaka, the "most experienced of the three main leaders" of the banned organization, was arrested during a raid by an elite French police unit at a hotel in the town of Macon, near the city of Lyon, it said.

She was arrested with a man, also described as an ETA member, who the statement and a French source identified as Joseba Iturbide.

They were arrested at 2:00 am (0100 GMT), a source said.

Both of them were in possession of weapons.

Lesaka had been on the run since 2005 and was sentenced in absentia to seven years in France in January over her involvement in ETA.

According to Spanish newspaper El Mundo, Lesaka was running the separatist group's military arm.

Born in Pamplona in 1975, she often used to stay in hotels and small bed and breakfasts to avoid detection.

Searches at the hotel in Macon continued Sunday afternoon. The roads leading to it were blocked off by unmarked police cars, an AFP photographer said.

The pair were driven away from the hotel in the afternoon in a police van.

The arrests were a new blow to the Basque separatist organisation, which announced a year ago that it had abandoned violence in its 40-year fight for an independent homeland in northern Spain and southwestern France.

ETA's armed struggle has claimed more than 800 lives.    

While vowing to abandon violence, ETA has refused to disband and disarm, though it has only dozens of active members left. The group is on the EU and US terror group lists.

Spanish Interior Minister Jorge Fernandez Diaz telephoned French counterpart Manuel Valls to thank him "for the decisive help", the Spanish interior ministry said, stressing the "enormous importance of this operation".

Valls for his part hailed the "fruitful Franco-Spanish cooperation" in fighting terrorism.

But radical pro-independence Basque groups slammed the arrests, which take to 24 the number of ETA members arrested, 16 in France alone.

"It is totally incomprehensible that a year after (ETA's announcement that it was abandoning armed struggle) they continue to make political arrests," said a statement by the Basque group Left Abertzale.