A day nursery has been closed after a staff member was arrested on suspicion of sexually assaulting a child.
Ofsted said registration had also been suspended at Kids Planet Nursery, on Heathfield Road in the Wavertree area of Liverpool, until the regulator is sure children can be kept safe there.
The staff member has been put on leave while the allegation is investigated.
Merseyside Police said a 38-year-old man from Liverpool had been arrested on suspicion of sexual assault.
He has since been released on conditional bail.
A force spokesman said the alleged victim "who is known to the suspect, has been safeguarded and they and their family are being supported by specialist officers".
"Enquiries into the allegations are ongoing," he added.
Kids Planet Nurseries said: "On 20 March 2021 Kids Planet Nursery, Wavertree became aware of an allegation that a member of staff had behaved inappropriately with a child.
"Following discussion between the nursery and the parent of the child, the matter was reported to all relevant safeguarding channels including the Local Authority Designated Officer and Ofsted.
"The member of staff concerned was placed on leave immediately as a matter of procedure whilst further enquiries take place.
"A referral has also been made to Merseyside Police who have commenced an investigation.
"Kids Planet is a well-established and highly regarded day nursery which has the most stringent safeguarding policies and procedures in place.
"The nursery is working closely with its safeguarding partners and will assist the police investigation in any way possible."
A Liverpool City Council spokesperson said: "We can confirm we are working alongside Merseyside Police and Ofsted in relation to an investigation into a safeguarding allegation at Kids Planet in Wavertree."
Ofsted said: "We have suspended the registration of the nursery as we have concerns regarding the provider's ability to keep children safe.
"We are liaising with the relevant agencies and are looking into these concerns to ensure that children's welfare is protected. We will regularly review the suspension."