Michaella McCollum-Connolly from Dungannon was arrested last week at the check in desk of Air Europa at Lima Airport, while attempting to board a flight to Madrid.
Anti-drug officers claim they discovered almost six kilos of cocaine worth around £1.5m in her luggage and that of her friend 19-year-old Melissa Reid from Scotland.
The 20-year-old's arrest emerged as her family had launched a major online missing person campaign after she had not been heard from in 12 days. She had previously been working as a nightclub hostess in Ibiza.
Stephen Breen, from the Irish Sun newspaper, said it is believed McCollum-Connolly is now on hunger strike in prison.
"She maintains she is innocent," he said.
"Her family are very anxious that she has found herself in this nightmare situation."
The Co Tyrone woman travelled under an Irish passport, but the Irish consul-general in Lima has recently retired and has not been replaced. It is understood the British consulate has been in touch with both women.
Archbishop Sean Walsh, based in Peru, has been in touch with the British embassy and hopes to speak to the pair later.
"There about 1,500 foreign prisoners in Peru, almost all of whom have came here to traffic," he explained.
He has liaised with other British and Irish people imprisoned there.
"The women's prisons, I think, are slightly better in the sense that women prisoners tend to help each other more than male prisoners do.
"She will have an official translator, she'll be taken to court and accused."
He said that it can take a few years before defendants are sentenced if found guilty in the South American country.
"They will tell her in accordance with the (alleged) amount she was carrying, what the possible sentence might be."
It is thought she could get between six and a half years and 15 years if found guilty of drugs-trafficking.