Convicted sex offender Phillip Garrido, 58, is being held for investigation of various kidnapping and sex charges relating to the disappearance of Jaycee Lee Dugard, who was 11 in 1991 when she was snatched from her school bus stop.

His wife, Nancy Garrido, 54, was also arrested, and authorities have alleged she was with Mr Garrido during the kidnapping in South Lake Tahoe.

According to investigators Mr Garrido allegedly raped Ms Dugard and fathered two children with her, the first when Jaycee was about 14. Along with Ms Dugard, who is now 29, the children, both girls now 11 and 15, were also kept hidden away from the world in the backyard compound of the Garrido house in California.

"Wait until you hear the story of what took place at this house," Mr Garrido said. "You are going to be completely impressed. It's a disgusting thing that took place with me at the beginning. But I turned my life completely around and to be able to understand that, you have to start there."

Police said the backyard compound where Mr Garrido allegedly kept Ms Dugard and the two children had electricity from extension cords and a rudimentary outhouse and shower, “as if you were camping”.

El Dorado County Undersheriff Fred Kollar said a parole officer who had visited Mr Garrido's house previously had not noticed anything amiss — the compound was well concealed by shrubs, garbage bins and a tarpaulin.

“You can't see over the fence with the shrubbery and the trees. You can't see the structures,” Mr Kollar said.

Mr Garrido's compound was located in Antioch, a city of 100,000 about 170 miles from Ms Dugard's family home in South Lake Tahoe. Yesterday the house was cordoned off with police tape as it was searched by FBI agents and the El Dorado County Sheriff's Department.

People who knew Mr Garrido said he became increasingly fanatic about his religious beliefs in recent years, sometimes breaking out into song and claiming that God spoke to him through a box.

“In the last couple years he started getting into this strange religious stuff. We kind of felt sorry for him,” said Tim Allen, president of East County Glass and Window Inc. in Pittsburgh, who bought business cards and letterhead from Garrido's printing business for the last decade. Three times in recent years, Mr Garrido arrived at Mr Allen's showroom with two “cute little blond girls” in tow, he said.

In April 2008, Mr Garrido registered a corporation called 'Gods Desire' at his home address. According to Mr Allen, during recent visits to the showroom, Mr Garrido would talk about quitting the printing business to preach full time and gave the impression he was setting up a church.

“He rambled. It made no sense,” Mr Allen said, adding that he had no inkling of Mr Garrido's criminal record.

“We never thought anything bad about the guy,” Mr Allen said. “He was just kind of nutty.”

In his interview with KCRA -TV Mr Garrido also claimed that he left important documents that would reveal key information about the case with an agent at the FBI office in San Francisco.

"What's kept me busy the last several years is I've completely turned my life around," Mr Garrido said. "And you're going to find the most powerful story coming from the witness, the victim - you wait. If you take this a step at a time, you're going to fall over backwards and in the end, you're going to find the most powerful heart-warming story."

It was also reported that Mr Garrido held religious services in a tent in his garden and had recently claimed to have invented a device that would allow him to control sound with his mind.