Italian financial police on Tuesday arrested a woman in Milan who was paid half a million euros ($590,000) by the Vatican into a Slovenian bank account, local media reported.

Cecilia Marogna was arrested at a friend's house in the northern city on an Interpol warrant issued at the Holy See's request, the website of daily Il Corriere della Sera reported.

The 39-year-old has been dubbed the "cardinal's woman" or the "500,000-euro woman" by journalists. And revelations about payments to Marogna have been all the spicier for her alleged ties to espionage and talk of shadowy Vatican power games.

The payments to Marogna came from Cardinal Angelo Becciu, whom Pope Francis abruptly removed from his role last month over suspected misuse of funds.

Appearing before journalists in early October with her face hidden behind large sunglasses, Marogna said the money had covered her services as a mediator securing the release of kidnapped priests and nuns in Africa and Asia.

In several interviews, she confirmed that the sum of 500,000 euros had been paid to her Ljubljana-based company Logsic.

Like 72-year-old Becciu, Marogna is originally from Sardinia.

The cardinal authorised the payments to her while serving as number two in the Vatican's Secretariat of State, which manages the Church's vast donations.

"I didn't steal a single euro," Cecilia Marogna told newspaper Domani of the payments made in tranches of tens of thousands of euros.

Rather, "I have a letter from the cardinal giving me the right to travel and conduct diplomatic relations to help the Church in difficult regions," she said, claiming to know "senior members of the Italian secret services".

She told Corriere della Sera that she is "not Becciu's mistress", calling herself a "political analyst and intelligence expert" with "a network of relationships in Africa and the Middle East" to protect the Vatican's representatives abroad.

Several Italian media outlets received anonymous envelopes with details from the accounts of Marogna's company.

Investigative TV programme Le Iene broadcast some of them showing spending of 200,000 euros on luxury products, including 12,000 euros for an armchair.

"I think I have the right to buy myself an armchair after all that work!" Marogna said, claiming that she is an innocent victim of internal Vatican power struggles.