Andrew's six-month standoff with the FBI deepened after Maxwell was detained for allegedly helping to lure underage girls who were then sexually abused by Epstein.
Her arrest in Bradford, New Hampshire, will now intensify calls for Andrew to be quizzed about any involvement he may have had, despite him denying wrongdoing.
Andrew has previously claimed he has offered three times to be a witness in the case, but US prosecutors say he has declined their request to schedule an interview.
A source close to the Duke's working group said: 'The Duke's team remains bewildered given that we have twice communicated with the DOJ in the last month and to-date, we have had no response.'
Royal author Robert Jobson has suggested Andrew must now be living in fear that Maxwell will implicate him in the 'gruesome' activities of paedophile Epstein.
Mr Jobson who has written several books about the Royal family said that the arrest of Maxwell had to be a ‘cause for concern’ and an ‘embarrassment’ for the Queen’s 60-year-old son.
‘He keeps protesting his innocence, but her arrest has brought everything more sharply into focus. It is certainly a very worrying development for him,' Mr Jobson said.
‘It is obviously a cause concern for him as nobody knows what she is going to say. She could strike a deal with prosecutors for a lesser sentence in return for implicating others.
‘I would have thought that in order to open up the case, she is going to be asked to name other names. That is where it could become even more difficult for Andrew.
‘If she says anything about him, and she is bound to be asked about him, it could implicate him or cause trouble for him. Whatever happens, it is an embarrassment because she was clearly close to him and there are some pretty gruesome charges against her.
‘If nothing else, it will bring into question his judgment when it comes to friendships as these are pretty unsavoury charges that she faces.’
Maxwell lived for years with Epstein, whose victim Virginia Roberts Giuffre claimed she arranged for her to have sex with the Duke of York at her London townhouse.
Andrew denied her story and claimed last month he was being treated as a second-class citizen by the US justice system, and it was untrue that he had not co-operated.
Gloria Allred, who is based in Los Angeles and represents 16 accusers of paedophile Jeffrey Epstein, said the Queen's 60-year-old son must 'contact the FBI immediately'.
Andrew and Virginia Roberts, aged 17, at Ghislaine Maxwell's townhouse in London in 2001
She said today: 'The arrest of Ghislaine Maxwell is a major development and demonstrates that the criminal investigation is serious and that it continues.
'It is long overdue for Prince Andrew to stop making excuses and to stop playing the victim. He should contact the FBI immediately and agree to appear for an interview.'
Asked what 58-year-old Maxwell's arrest could now mean for the Duke, a spokesman for his legal team told MailOnline this afternoon: 'We won't be commenting.'
Today, Audrey Strauss, acting US Attorney for the Southern District of New York, said she would 'welcome Prince Andrew coming in to talk with us to have the benefit of his statement' but would not comment further on him in relation to the probe.
Ms Strauss said the FBI would be 'seeking detention' for Maxwell and that her team would be 'in dialogue with the Bureau of Prisons about it'.
When asked if she would be willing to hear evidence from Maxwell concerning others involved despite the perjury charges against her, Ms Strauss said: 'This sometimes happens when there are perjury charges and people can go on from there and become co-operators if that is what you are asking, so I'm not concerned about that.
Epstein is pictured with Ghislaine Maxwell in New York in 2005. Lawyers for Maxwell have previously said she denies any wrongdoing
'In the event that she were to become a co-operator, I think that we can deal with that.'
Andrew has previously said he became friends in 1999 with Epstein - who killed himself in jail last August - after being introduced to him through Maxwell.
The Duke, who stayed at Epstein's house in 2010 after the financier's conviction, said in a disastrous BBC interview last November that he did not regret their friendship.
Epstein and Maxwell were at a party hosted by the Queen at Windsor Castle in June 2000, and also attended a party for Maxwell at Sandringham in December that year.
Royal author Mr Jobson said he believed that the Duchess of York had first introduced Andrew to Ghislaine, the daughter of crooked newspaper tycoon Robert Maxwell who plunged to his death from his yacht in mysterious circumstances in 1991.
Ghislaine in turn introduced Andrew to billionaire Epstein who jumped at the chance of ingratiating himself with a member of the Royal family.
Mr Jobson said: ‘Andrew was clearly close to them both. He invited them to Royal enclosure at Ascot and a party hosted by the Queen at Windsor Castle in 2000 as well as a shooting weekend in Sandringham later in the same year.
‘It is the case that Ghislaine has also associated with other members of the Royal family, so people are going to become quite concerned.
‘She has ben in the Royal circle so it becomes more and more embarrassing because it is all getting closer and closer to the Queen.
‘Andrew has tried to distance himself a bit from Epstein and can say that more was made of their friendship than what there actually was, but it was clear that he was still friends with Ghislaine after his friendship with Epstein ended.
‘He was in touch with her long after he severed his ties with Epstein.’
Mr Jobson said Andrew’s closeness to Ghislaine was illustrated by the infamous photograph of him with his arm around 17-year-old Virginia Roberts which was said to have been taken in Ghislaine’s flat in London in 2000.
He said: ‘While some close to Andrew have said the photograph was fabricated, the key problem is that it was allegedly taken at Ghislaine’s home and she is there in the picture lurking in the background.
‘The photograph is being used all the time, so now that she has been charged with procuring under age girls, it has become even more of an embarrassment and potentially damaging for him.’
Lawyer Gloria Allred, who is based in Los Angeles and represents 16 accusers of paedophile Jeffrey Epstein, is pictured outside Manhattan Criminal Court in New York on February 21
Andrew is photographed with the disgraced Epstein in New York's Central Park in 2010
The US Department of Justice has formally asked the Home Office for help to question the Duke, which could see him grilled in court about his links to Epstein.
But Andrew's lawyers said it was a cynical publicity stunt, accusing US officials of breaking their own rules, telling untruths and trying to mislead the global public.
Today, an indictment claimed Maxwell 'assisted, facilitated and contributed to Jeffrey Epstein's abuse of minor girls by, among other things, helping Epstein to recruit, groom, and ultimately abuse' girls under the age of 18.
Mr Jobson who has written books on Prince Charles and Princess Diana also said that Maxwell’s arrest made it an even more distant prospect that Andrew would ever be able to return to public life as a working Royal.
He said: ‘At this moment in time, until this matter is completely cleared up and people are satisfied that he is telling the truth and is completely innocent, as he says he is, there is no way back for him because there is so much hanging over him.
‘It would be impossible for him to carry out his duties. The fact that the whole Epstein saga is now on Netflix and there is a new book about it doesn’t help his case.
‘But I don’t think he is going to put himself in a position where he could be charged. I don’t see him going to America.
‘The only way he can start to clear his name is to present himself for questioning to the FBI. I don’t think his lawyers will want him to do that because it could leave him exposed.
‘It means he is between the devil and the deep blue sea because he can’t expose himself and risk becoming the next central focus of the Epstein inquiry.’
Epstein killed himself in a federal prison in New York last summer while awaiting trial on sex trafficking charges. Maxwell was accused by women of recruiting them to give Epstein massages, during which they were pressured into sex.
The indictment included counts of conspiracy to entice minors to travel to engage in illegal sex acts, enticement of a minor to travel to engage in illegal sex acts, conspiracy to transport minors with intent to engage in criminal sexual activity, transportation of a minor with intent to engage in criminal sexual activity and two counts of perjury.
Maxwell has previously repeatedly denied wrongdoing and called some of the claims against her 'absolute rubbish'.
She was described in a lawsuit by another Epstein victim, Sarah Ransome, as the 'highest-ranking employee' of Epstein's alleged sex trafficking ring. The lawsuit claimed she oversaw and trained recruiters, developed recruiting plans and helped conceal activity from police.
The US Attorney for the Southern District of New York will announce charges later today against Maxwell 'for her role in the sexual exploitation and abuse of multiple minor girls by Jeffrey Epstein'.
Federal prosecutors said in court papers she had 'enticed and caused minor victims to travel to Epstein's residence in different states' and that Maxwell would assist in their 'grooming for and subjection to sexual abuse.'
Prosecutors charged that Maxwell was well aware of Epstein's preference for minor girls, and that he intended to sexually abuse them.
Maxwell has kept a low profile since the death of Epstein, a financier who was accused of raping and trafficking underage girls over nearly two decades.
Some of Epstein's alleged victims have said Maxwell lured them into his circle, where they were sexually abused by him and powerful friends. Maxwell was an ex-girlfriend of Epstein who became a longtime member of his inner circle.
Andrew had promised last year, after a disastrous Newsnight interview, to 'help any appropriate law enforcement agency with their investigations' into Epstein.
According to Andrew, the first he heard from the FBI in their 16-year investigation into Epstein was on January 2.
And he was just beginning the process of suggesting how he might answer their questions when, according to his friends, the Americans 'went nuclear'.
On January 27, Geoffrey Berman, the top federal prosecutor in Manhattan, stood outside Epstein's New York mansion and publicly accused the prince of reneging on his pledge by offering 'zero assistance' to the FBI.
On March 9 he claimed the royal had 'completely shut the door' on cooperating.
One of Epstein's victims, Virginia Roberts, now Virginia Giuffre, alleges she had sex with the Duke of York three times when she was 17 at the behest of the billionaire paedophile
Andrew (second left) has said he became friends with Jeffrey Epstein (right) in 1999, after being introduced to him through Ghislaine Maxwell. Pictured: Melania Trump, Andrew, Epstein's friend Gwendolyn Beck and Epstein at a party at the Mar-a-Lago in Florida in 2000
But on June 8, as Epstein's victims demanded he 'end the cat and mouse game', Andrew's City law firm Blackfords issued a 604-word statement effectively calling the Americans liars.
It called Mr Berman's claims 'inaccurate' and said it had agreed to cooperate with the Department of Justice on the basis 'our discussions and the interview process would remain confidential', insisting it was given an unequivocal assurance on this point.
Blackfords said: 'The Duke of York has on at least three occasions this year offered his assistance as a witness to the DoJ.
'Unfortunately, the DoJ has reacted to the first two offers by breaching their own confidentiality rules and claiming that the Duke has offered zero cooperation. In doing so, they are perhaps seeking publicity rather than accepting the assistance proffered.'
The statement by Andrew's lawyers continued: 'It is a matter of regret that the DoJ has seen fit to breach its own rules of confidentiality, not least as they are designed to encourage witness cooperation.
'He is being treated by a lower standard than might reasonably be expected for any other citizen. Those same breaches of confidentiality by the DoJ have given the global media - and, therefore, the worldwide audience - an entirely misleading account of our discussions with them.'
But Mr Berman hit back by saying: 'Prince Andrew yet again sought to falsely portray himself to the public as eager and willing to cooperate with an ongoing federal criminal investigation into sex trafficking and related offences committed by Jeffrey Epstein and his associates, even though the prince has not given an interview to federal authorities, has repeatedly declined our request to schedule such an interview, and nearly four months ago informed us unequivocally - through the very same counsel who issued today's release - that he would not come in for such an interview.
'If Prince Andrew is, in fact, serious about cooperating with the ongoing federal investigation, our doors remain open, and we await word of when we should expect him.'
Andrew spoke to the BBC's Emily Maitlis for a Newsnight interview in November last year
Andrew is being represented by Clare Montgomery, a leading QC in extradition cases. She represented the Chilean military dictator Augusto Pinochet and also the Swedish state in its 2012 attempt to extradite Julian Assange.
Last month it was also revealed that the DoJ formally applied to the Home Office in May under a 1994 treaty between the two countries to provide Mutual Legal Assistance.
The request from the Americans - a 'diplomatic nightmare' which has yet to be granted, according to Whitehall sources - means Andrew could be forced to answer FBI questions in a British court.
He would in theory be entitled to 'plead the 5th' Amendment, remain silent to avoid incriminating himself.
Asked previously during a Fox News interview whether the US had asked Britain to hand over Andrew, attorney general William Barr said: 'I think it's just a question of having him provide some evidence.' Asked if he would be extradited, Barr replied 'No'.
Gloria Allred, who represents two women treated as sex slaves by the late Epstein, previously said: 'By refusing to voluntarily answer questions posed by law enforcement, Prince Andrew has demonstrated disrespect for the victims and their need to know the truth.
'It is time for the prince to stop this cat and mouse game and stand before the bar of justice'.
Miss Roberts, 36, who claims she was forced to have sex with Andrew three times when she was 17, previously retweeted a comment calling on the Home Office to extradite him to America.
Andrew vehemently denies any wrongdoing and says he does not even recall Miss Roberts.