Forget about the MOSFET. Just place a diode in ANTIPARALLEL with the motor (so there is no short circuit between the battery. the diode should be placed with the anode to the negative terminal of the motor and the cathode to the positive terminal of the motor).
Just like this (the resistance and inductor represent the inductance of the motor coil and the resistance of the coil's wire):
**broken link removed**
The arc is produced by suddenly disconnecting current through an inductive load (the motor). THe inductance tries to keep the current flowing and only lets it change gradually. To keep it flowing, a voltage spike is produced and this voltage spike will rise until a spark is formed somewhere to allow current to continue to flow (and collapse gradually). This spark is your switch arcing. It would happen even if you used a MOSFET instead of a mechanical switch (like a relay or anything else). THis is called the motor's flyback. THe diode gives this flyback current a path other than sparking across the switch when it opens.
EVen if you had a MOSFET, you would still need a diode in parallel with the motor to protect the MOSFET from the motor's flyback voltage spike. Unlike the switch which arcs and keeps on working, a MOSFET will BURN AND DIE when the spike happens if you don't have the diode. So leave the switch alone and add a diode.
PS. It's best to make it a low-forward voltage, fast recovery diode like a schottky diode. Make sure it can handle the peak pulse current of the motor and of course it has to be able to withstand the voltage of the battery in the reverse direction. You probably relax the low-forward voltage, fast recovery diode part since you are using a switch which has been working just fine with the arcing. If it was MOSFET on the other hand, it'd be more important since the MOSFET dies to overvoltage (which causes the arcing) more easily.