The former flames were pretty much inseparable on the White Isle but despite their recent reunion, Lydia insists they're not "official".
Speaking exclusively to Reveal, Lydia tells us: "We went over to Ibiza and we were in the same hotel and we had a bit of a holiday romance. It was all really good but we're not actually official. We're getting on well and we have that chemistry. We were together for a long time as well so it's nice that we get to hang out."
In fact, while the on-off couple were in Ibiza, Lydia's mum Debbie Douglas tweeted Reveal, saying: "2014 version of Elizabeth Taylor and Richard Burton can't live with each other and can't live without @LydiaRoseBright and Arg."
And Lydia pretty much agrees...
"It's quite hard because we are both on TOWIE," says Lydia. "When I left the show, we never really saw each other for around two years and then I came back and we were around each other all day, every day."
Lydia ended her four-year relationship with Arg in December 2011 after learning he'd cheated.
"I think when we are around each other it's really hard for us to keep apart," she says. "We have a lot of chemistry there and there is a lot of love between us both but it's just circumstances that broke us up and if that didn't happen we'd probably still be together till this day.
"We do argue, it's love and hate. We'd be kissing each other and then all of a sudden we'd argue."
But the big question is, will they get back together and make it official?
"Who knows? I'm just going to wait and see what happens."
In the last series, Lydia confessed to her mum Debbie that she didn't like the amount of time Arg was spending with her mother, but now, Lydia tells us that she's no longer bothered by it.
"I love that they're really close," Lydia continues. "It's nice that they have a really good relationship and I wouldn't want to stop that."
Lydia quit the Essex-based reality show at the end of 2012, and made her return to the show at the end of series 11 in April this year. She became a permanent cast member again at the start of series 12.
"I'm loving being back," she adds. "I really am enjoying it and I'm so glad that I made the decision to come back. It's been really fun and it's been a much better experience that I thought."
TOWIE returns with The Only Way is Ibiza on Wednesday 8 October at 9pm, exclusively on ITVBe.
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