US authorities said an alleged kidnapper fathered two children with the woman who emerged 18 years after being snatched from a bus stop.

The new details came as authorities provided more information about the saga of Jaycee Lee Dugard, who vanished when she was 11 years old and turned up at a police station in Northern California this week.

El Dorado County Undersheriff Fred Kollar said the woman spent most of her time in sheds, tents and outbuildings to isolate her from the world.

Police said her captor was Phillip Garrido. He is being held for investigation of kidnapping, rape by force, lewd and lascivious acts with a minor and sexual penetration.

The FBI was yesterday searching the home Garrido shared with wife Nancy, 54, who is also being held on $1million bail. The couple were booked into the Contra Costa County Jail in Martinez, but have since been moved to an undisclosed site in Northern California, apparently for their own protection.

Reporters descending on the rambling property, in a rural area near Antioch, say that local police believe Ms Duggard was kept in captivity in a shed for at least two years, before being moved around a range of different outbuildings.

Neighbours described the Garridos as an eccentric couple, who had security bars on all of their windows conducted what were described as "religious revivals" in a tent in their untidy garden.

According to one acquaintance, they claimed to have developed a device that allowed them to control sound with their mind. Former visitors said that several children seemed to be living on their property.

The arrest on Wednesday took place in bizarre circumstances. Mr Garrido was apparently brought in for questioning to a State Parole Office in Concord after a member reported suspicious activity involving him the previous day on the campus of UC Berkeley, a local university.

After what police described as "diligent questioning," it soon emerged that the woman who was accompanying Garrido to the Parole Office was the missing Jaycee Lee Duggard. The two children were his.

The discovery of Ms Duggard brings an extraordinary – if somewhat grim – conclusion to a saga that began in June 1991, when she was grabbed by a couple driving a grey saloon car as she waited at a bus-stop, half a mile from her front door in South Lake Tahoe.

Jaycee Lee's stepfather, Carl Probyn, witnessed the abduction, telling police and reporters at the time that he had seen her bundled into the vehicle by a man and a woman. Although he gave chase on a bicycle, he was easily out-run.

Several other witnesses came forward. But despite state-wide roadblocks, an international FBI investigation, and the fact that Jaycee Lee was wearing a distinctive pink outfit, police failed to get any meaningful leads. No arrests were ever made.

Probyn, who these days lives in Orange County, told reporters that he learned of Jaycee Lee's discovery on Wednesday afternoon when his wife, Terry, and daughter, Shayna, telephoned out of the blue.

Shanya told him "Mom has something to say to you. Are you sitting down?" The phone was then handed to Terry, who announced: "They found Jaycee. She is alive."

The couple are said to have spent the next ten minutes in tears, as they discussed the remarkable news. Probyn revealed that his wife is, understandably, "in shock."

"I had personally given up hope. This is a miracle," he said. "She's had a conversation with my wife, and she remembers everything.... They talked back and forth and she had the right answers to all my wife's questions about her childhood."

Much like the disappearance of Madeleine McCann, which sparked a similar media frenzy in the UK two years ago, the case initially generated enormous public interest - and suspicion initially fall on Probyn, the last person to see her alive.

"The FBI put me through the wringer, having people say the step-dad did something," he told reporters. "I have been kind of the villain these past 18 years. I've gone through hell. [But] I've never spent a day in my life in jail. My last speeding ticket was in 1977."

As the family flew north to San Francisco to be reunited with their daughter yesterday, questions were being raised as to how Garrido escaped the scrutiny of investigators for so long.

Officials said Garrido had been arrested in Nevada for sexual assault in the late 1990s, and served time in State prison. He was paroled in June 1999, but parole officers never got round to visiting him at home.

Mystery also surrounds what happened to Duggard during the years that he was held in custody. Federal records also show that Garrido has a separate kidnapping conviction related to an offense committed in 1980.