The former glamour model, 40, spent the night in a cell at Plumstead police station, South East London, after the arrest in the early hours of Wednesday morning.
The alleged incident occurred after she gatecrashed ex-boyfriend Kris Boyson's 30th birthday party at a restaurant in Bexleyheath, South East London.
Now it's been claimed she arrived at the bash following an argument with new beau Alex Adderson.
A source told The Mirror the mother-of-five told guests she had argued with Alex, 25, saying: "Katie arrived around midnight and it appeared she might have had an argument with her new boyfriend.
“Kris wasn’t expecting her. He took her to one side. She wasn’t there very long and left alone.
"Kris is a good friend and didn’t like to see her upset. He wanted to comfort her.”
A few hours later, Katie was breath-tested after her pink Range Rover crashed into a VW Golf and a hedge on a gated estate at 2am.
Witnesses claimed they saw a woman "gesticulating wildly" before the car ploughed into a bush.
After her arrest, Katie spent the night in a cell at Plumstead police station, South East London, before she was released under investigation via a rear exit around 3.30pm.
Kris was pictured arriving at the police station, before the former couple were driven away in a black car.
A source said the mum allegedly denied being behind the wheel at the time of the crash.
Resident Alena Traczyk, 39, said she was woken by a loud crash, adding: “I saw a pink Range Rover swerving into the car park.
“It paused for a minute, the light came on inside the car and I saw a woman gesticulating wildly.
"Then the car sped away, straight into a bush.”
Katie, who has been receiving treatment at The Priory, is supposed to abstain from drinking alcohol while in treatment and had desperately tried to keep her boozing secret from her family.
But she reportedly decided to take a break from the 28-day rehab stint just days before her arrest.
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