David Cameron has delivered his strongest hint yet that Andrew Mitchell could return to government.
The Prime Minister said allegations that a police officer posed as a member of the public and fabricated evidence to damage the then-chief whip were "extraordinary".
It is understood he believes that Mr Mitchell's position has strengthened substantially as a result of the explosive developments.
The warm signals came as the Police Federation of England and Wales acknowledged concerns that it had "stoked up" the so-called "plebgate" row.
Chairman Paul McKeever said he would apologise to the MP if it was shown he had been wrongly accused.
It also emerged that police have arrested and questioned a second man. The 23-year-old, who is not a police officer or member of police staff, was detained last night on suspicion of intentionally encouraging or assisting the commission of an indictable offence on December 14, Scotland Yard said.
That date was a day before a member of the diplomatic protection group was arrested on suspicion of misconduct in public office.
The officer is said to have emailed his local MP, Tory deputy chief whip John Randall, posing as a member of the public and accusing Mr Mitchell of calling police "plebs".
On Wednesday, the Met widened the investigation amid growing tensions with senior Conservatives over the treatment of Mr Mitchell, who resigned in October after a month of huge pressure. Around 30 officers are working on the inquiry, which is being supervised by the Independent Police Complaints Commission (IPCC).
Mr Cameron, who is visiting Afghanistan, was asked in interviews if Mr Mitchell could make a comeback. "One step at a time. Let's get to the truth about what happened," he said. "But I think it has been an extraordinary development, frankly, to find a police officer apparently posing as a member of the public, pretending to have been outside Downing Street at the time and then trying to blacken the name of a Cabinet minister."