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A car seized in relation to the apparent murder of British backpacker Grace Millane appears to be the key piece of evidence in her death, a former police inspector says.

A 26-year-old man was in custody last night, with police revealing he would be charged with murder, and will appear in the Auckland District Court tomorrow.

Police also seized a car yesterday and it was likely used to transport Millane's body, which was still missing, retired Bay of Plenty District crime manager and Detective Inspector Graham Bell said.

The police priority would be tracking the vehicle's movements with GPS or using cellphone towers - which was possible even if the mobile phones of those in it were switched off, he revealed.

The week-long search for the 22-year-old backpacker from Essex took a tragic turn yesterday when Auckland police said at a 5pm press conference they believed she had been murdered. They said they had taken a man into custody at 3pm and were speaking to him in relation to the murder of Millane.

They then about 9pm said the man would be charged.

He had been with Millane at Auckland's CityLife Hotel at 9.41pm last Saturday - the last time she was seen.

There was no evidence they knew each other before Millane disappeared but Detective Inspector Scott Beard wouldn't comment on speculation they may have met on Tinder.

"Everybody who is a parent will understand what the family is going through," said Detective Inspector Scott Beard. Photo / Doug Sherring

"Sadly the evidence we have gathered to this point of the inquiry has established that this is a homicide."

Asked why police were now treating Millane's disappearance as murder, he said it was a combination of factors.

"The evidence we have located so far, our scene examination, from the CCTV footage we have and our investigation, has determined that Grace is no longer alive and this is a murder investigation."

They had received several phone calls from the public and those were being "worked through and prioritised".

Grace Millane hasn't been seen since December 1. Photo / Supplied

Police were trying to find out where the vehicle had been since Millane's disappearance a week ago.

"I know that the thoughts of all New Zealanders will be with Grace's family and I want to reassure everyone here and abroad that New Zealand police are determined to do everything we can to find her," Beard said.

Bell said the police would be doing "forensic examinations at length" on the car, trying to find any physical evidence - DNA, fingerprints, or clothing fibres.

"They will also be trying very hard to see where that vehicle has been. I would say that is a key element of the whole thing. She's been [allegedly] murdered and they don't know where the body is so you need a vehicle to transport the body."

The first step could be to publish a description and picture of the car and ask for public sightings. If that failed to turn up information, police could track Millane's and the suspect's mobile phones through GPS or through polling - checking which mobile phone towers had picked up their signal.

Another priority would be finding three items which police said were missing - Millane's passport, a pink Casio Baby-G watch and a necklace.

"There's a chance that the killer has tried to get rid of those," Bell said.

Beard broke the news of Millane's death to family yesterday and said they were devastated.

Her father David flew into Auckland on Friday and made a tearful plea for anyone who knew anything to contact police.

"Everybody who is a parent will understand what the family is going through ... our hearts go out to them," Beard said, coming close to tears.

Other family, including Millane's mother Gillian who is unable to travel to New Zealand because she is recovering from an operation, are waiting in the United Kingdom for news.

Beard said police were determined to return Grace to her family, who have spread word of the talented artist and university graduate's disappearance worldwide since her daily social media contact with family stopped the night before her 22nd birthday on Sunday.

Millane had arrived in New Zealand on November 20, as part of a year-long, worldwide overseas experience that began earlier this year in South America.

Grace's father David Millane makes a plea for information. Photo / Doug Sherring

A guest at the 26-storey CityLife hotel on Queen St told the Herald on Sunday yesterday police were talking to everyone who had stayed on the same floor as the man who was in custody.

Police officers were also seen walking the streets around the hotel, apparently checking for CCTV cameras.

"They've probably got several people meticulously trawling through every bit of security camera footage they can find from the inner city," Bell said.

"It's a big job and it's a laborious task because most of the time you're just looking at inconsequential movement, people coming and going."

The last sightings of Millane were on last Saturday evening in one of the busiest parts of the city. She was captured on CCTV leaving Andy's Burgers & Bar on the first level of SkyCity at 7.15pm last Saturday. Police said she and the suspect went to several places before heading to the CityLife hotel.

Beard wouldn't say whether police had seen footage of the man leaving CityLife Hotel or if he thought Millane was killed in the hotel.

At Base Backpackers on Queen St, where Millane had stayed for two weeks before disappearing, several shocked guests watched the news last night of her suspected murder.

Police removed her remaining belongings from her room earlier in the week.

The Lucie Blackman Trust, which has been supporting Millane's family, posted on its Facebook page they were "incredibly saddened" by the police announcement.

"Thank you to all who helped try and find Grace.

"Our thoughts are with her family at this awful time."

The trust was set up by family of a British woman who disappeared and was later found dead in Tokyo, and supports families of Brits in crisis overseas.