Mark Hamilton Pendlebury, 59, is believed to have been walking home from a Rotary meeting when he became involved in an altercation outside a nightclub in Patong, a tourist entertainment area on the island.

Formerly of Western Australia, Mr Pendlebury is involved in charity work, runs a boating business and has lived on Phuket for about 10 years.

Initial police reports say he was walking past the Taipan nightclub at about 12.30am when he saw a scuffle involving a security guard evicting customers.

The Phuketwan news website quotes police saying Mr Pendlebury attempted to photograph the incident and an altercation ensued that led to stab wounds to the guard.

Both Mr Pendlebury and the guard were taken to Patong Hospital but the guard died soon after arriving. Mr Pendlebury's arrest has shocked foreign business people on Phuket.

Earlier this week he was arranging a boat trip for a handicapped Danish man who had been brutally attacked on a Phuket beach. Mr Pendlebury was providing the trip to help the man's recovery.

Foreign volunteer police, including Australians, who usually patrol the streets of Patong where the altercation occurred stopped their patrols several days ago over a dispute with Thai police.