The 50-year-old had worked in the Libyan oil industry since 2000 as a financial manager but left suddenly three years ago.
Police are investigating various theories into her disappearance which include that she may have been a high class hooker.
However her former boss Stuart Anderson, who described Miss Waugh as wealthy, dismissed the allegations and said she left because she was threatened by someone 'very close to Gaddafi'.
Mr Anderson, who ran MSL Services in Libya, said he and his wife Leigh counted Miss Waugh as a close friend and became concerned when she left the country without an explanation.
'Later she sent me a letter explaining and apologising. She wrote to say that she had been threatened by one of our Libyan business partners who was very close to Gaddafi. She said she was very frightened,' he said to the Sunday Times
not looking good police have arrested a man origanally arrested for kidnapping now for suspision of murder
http://www.bbc.co.uk/news/uk-england-london-19085957
"Information has been received which has progressed this inquiry and we are now treating Carole's disappearance as a murder investigation.
"I am unable to go into further detail about the nature of the new information at this time, however, we now believe that Carole has not been seen alive since 16 April.
"I am releasing images of items of Cartier jewellery, identical to that worn by Carole, which are amongst items missing from her personal possessions.
"The jewellery that is missing is as follows: a Cartier ring, a white gold bracelet; a yellow gold bracelet and a yellow gold necklace, which are all in the same style.
"Carole wore the jewellery regularly and I appeal to anyone may have been offered such jewellery or has any knowledge of its whereabouts to contact us with information.
Detectives investigating the disappearance of oil executive Carole Waugh discover a woman's body in a car in a garage in London.
Detective Chief Inspector John McFarlane said: "The vehicle is a blue VW Golf, registration number W466 NHL. We need to hear from anyone with information on the car, particularly since April this year. Anyone who can assist us on where it has been since then, or can advise on anyone with a connection to it, should come forward."
While formal identification is yet to take place, police believe it is the missing woman, who vanished from her £650,000 flat in Marylebone, central London, more than three months ago.
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One man who has worked nearby for about five years said the garages were mainly used for storage by builders.
He said: "There have been some small problems with stolen goods being stored but certainly no major crime."
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Police have so far arrested a total of 10 people in connection with Miss Waugh’s disappearance. One man has been charged with three counts of conspiracy to commit fraud by false representation, and eight others have been bailed.
The man who is being questioned over her murder was initially arrested on suspicion of kidnap and conspiracy to defraud before being re-arrested on Wednesday.
Detectives investigating the murder of missing businesswoman Carole Waugh have found a body of a woman in a lock-up garage in south London.
The body may have been in the boot of a car which was also found at the rented garage off a quiet street in New Malden.
Police say the body has yet to be formally identified but it is believed to be that of Ms Waugh, who was last seen alive on April 16.
Police said the body was taken to Kingston mortuary after being discovered at 7pm last night. A post-mortem examination was due to take place today.
The body is believed to have been in an advanced state of decomposition.
Forensic science experts were searching the garage in Lime Court, a cul-de-sac near New Malden railway station and a primary school. Sources said the discovery followed “extensive enquiries and a lot of hard work”.
Detectives looking for a missing oil executive have found a body in a lock-up garage, a day after the search for her became a murder inquiry.
Scotland Yard said a woman's body was found in a car in a garage in Lime Court, New Malden, south west London, on Thursday night and are appealing for information about the blue Volkswagen Golf with the registration number W466 NHL.
no link yetJon Clements ‏@JonClementsITV
Missing businesswoman Carole Waugh was stabbed once, post mortem reveals. Police confirm body found in car in lockup last night is hers
Nicholas Kutner, charged with defrauding murdered millionaire oil executive Carole Waugh, allegedly rented her flat out twice for a total of £10,000, a court hears.
Nicholas Kutner, 47, is accused of pretending to be Chris Waugh, Miss Waugh's brother, in a bid to rent and then sell her £650,000 London home.
Kutner also tried to withdraw funds from the 50-year-old's bank account, it is alleged.
Nicholas David Kutner, 47, of no fixed abode, is accused of pretending to be Chris Waugh, Ms Waugh's brother, in a bid to sell her London home.
Kutner has been charged with committing fraud along with unemployed Rakesh Bhayani, according to Scotland Yard.