Stephen Johnson, who denies any wrongdoing, has appeared in court in the Canary Islands, accused of fatally stabbing a 25-year-old Moroccan man in the popular resort of Playa de las Americas.
He has been released from custody on bail, but is not allowed to leave the country and is believed to have surrendered his passport to the authorities.
The 54-year-old dad-of-two, from Elvet Green, Hetton, runs Stepy's Coaches, which has sponsored the Durham and District Sunday Football League for a number of years.
As well as catering for weddings, anniversaries and hen nights, the family-run firm has regular pick-up points for weekend revellers from Easington, Seaham, Shiney Row and Houghton, and returns from outside Fitzgerald's.
Mr Johnson was arrested after the incident on January 11.
A Foreign Office spokeswoman told the Echo: "We can confirm that he has been released on bail, but he is not at liberty to leave the country."
She added: "We are providing him with consular assistance."
Mr Johnson's family declined to comment.
It has been reported that the Moroccan was involved in a fight with four men in an area known at The Patch.
The victim was discovered lying in a pool of blood by security staff, who alerted police, at the top nightspot Americas Shopping Centre in Avenida Rafael Puig.
He was taken to the nearby Hospital Sur in a critical condition, but doctors pronounced him dead shortly afterwards from a stab wound to the stomach.
A man from Liverpool has also been arrested by Spanish Police, as an accomplice to murder.
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