A 26-year-old man is in police custody as investigators continue enquiries into the death of 12-year-old Mercedes Cabrera-Layne, whose body was found in a forested area in Erin on Sunday morning, hours after she was reported missing.

Mercedes, of Los Iros, Erin, was reported missing at approximately 4 p.m. on Saturday by her grandfather, after she failed to arrive home.

According to police, the child had spent Friday night at her grandfather's home at Lorensotte North Trace, Rancho Quemado. Around 11.30 a.m. on Saturday, he placed her in a vehicle that was supposed to take her to her home along Los Iros Beach Road, Erin.