TMZ broke the story ... Jones was arrested yesterday after cops say he was driving on a suspended license.

But a rep for the rapper tells us ... it's all a HUGE misunderstanding ... explaining, "Jim does not have a suspended license."

The rep insists there must have been a mistake in the computer system ... and says Jim's lawyers have already been dispatched to remedy the situation.

The worst part ... Jim claims he was originally sitting in the PASSENGER seat of the car ... when his driver stopped in front of a store to pick up a few items. Jim claims cops approached him and told him to move the car ... so he did ... and shortly after Jim got in the driver's seat, he was pulled over. During the stop, cops were informed he had a suspended license ... and took him into custody.

Still, the rep tells us ... the cops were "very cool and respectable" during the incident ... and adds, "It'll all be thrown out."