The newspaper did not publish on Sunday after a message on state TV saying Bahrain’s Information Ministry had ordered the paper to shut down.
The state-run Bahrain News Agency (BNA) says officials accuse Al-Wasat of “unethical” coverage of the uprising against the country’s rulers.
The Kingdom’s Information Affairs Commission also referred the newspaper for investigation, BNA said.
Al-Wasat has been accused of publishing “fabricated” reports last week about the “security developments in Bahrain”.
State television also claimed that the daily printed “false news” and “fake names of people claimed to have been abused by police”.
Al-Wasat’s online edition also was blocked.
The newspaper is headed by Masur al-Jamri, a former opposition activist during the Shia uprising in the 1990s, who returned to Bahrain in 2001 following a royal pardon.
Bahrain has sharply tightened Internet and media controls under the emergency rule imposed last month after the anti-government protests.
It also called in Persian Gulf-Co-operation Council troops to quell the pro-democracy protests.
Withdrawal of Saudis kicks off
Meanwhile according to informed sources, numbers of Saudi occupation forces started to withdraw from Bahrain on Sunday.
According to al Awamiya website, One of Saudi authorities “Khaled bin Sultan” visited east of Saudi Arabia, as a result of which some of Saudi forces in Bahrain deployed there to secure the area.
In another development, Bahraini police attacked Hussayniat al Qasab on Sunday early morning, break down doors, holy objects and vandalized its walls, ABNA reported.
On Thursday also Saudi Wahhabi forces attacked Hazrat Zainab Masjid in Hamad town and set it on fire and burned all holy objects including holy Quran.
The masked men threw Molotov cocktails in to the Masjid and burned it.
Bahrain has been the scene of nationwide anti-government protests since February 14.
Opposition groups say dozens of people have gone missing, at least 25 have been martyred and more than 1,000 have been wounded. It has also been reported that at least 250 Bahrainis have been detained.
Demonstrators demand a new constitution that would limit the king’s powers. They are also calling for Prime Minister Khalifa bin Salman Al Khalifa to step down