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Journalists stand in front of the prison in Neumuenster, Germany, April 5, 2018. REUTERS/Fabian Bimmer

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By Thomas Escritt

BERLIN (Reuters) - A German court on Thursday rejected an extradition request for Catalonia's former leader Carles Puigdemont on the charge of rebellion for his role in the campaign for the region's independence.

The court agreed to release Puigdemont on bail and said extradition to Spain was possible on the lesser charge of misuse of public funds. The former Catalan leader was arrested last month on a Spanish-issued arrest warrant as he entered Germany.

The ruling means Puigdemont, who fled Spain five months ago for Belgium after Spanish Prime Minister Mariano Rajoy dismissed his regional administration, cannot be tried for rebellion in Spain once extradited on the lesser charge, a German court spokeswoman said.

"The court must now decide if extradition for embezzlement is a possibility," said spokeswoman Frauke Holmer.

"If that is the case, and Mr Puidgemont can be extradited for embezzlement of public money, then a prosecution for rebellion is not possible."

Spain respects the German court's decision, a Spanish government spokeswoman said earlier.

Spain's Supreme Court reactivated international arrest warrants last month for Puigdemont and four other Catalan politicians who went into self-imposed exile last year.

Asked by Reuters whether the German court was correct to say Puigdemont could not now be put on trial for rebellion, neither the Spanish government nor the Supreme Court would comment.

The German court said the rebellion charge Puigdemont faced in Spain was not a criminal offence in Germany, while the violence component that would justify a high treason charge was also lacking.

"The actions for which the subject is being prosecuted would not be criminal under German law," the court spokeswoman said.

The charge of rebellion can bring up to 25 years in prison in Spain.

The German court set bail at 75,000 euros ($92,000). Puigdemont must remain in Germany while extradition proceedings continue and must report weekly to police, the court spokeswoman said.

"There is a risk of flight," the court said in its explanation of its decision to grant bail. "But since extradition on rebellion charges is impermissible, the risk of flight is substantially lessened."

Puigdemont is arranging the transfer of the bail money to Germany, his German lawyer Wolfgang Schomburg told Reuters in a telephone conversation.

"We hope that we can arrange it so that by tomorrow morning he is a free man and can live in Germany in the following days and weeks," he said.

"We seriously hope Spain will be intelligent enough to withdraw the entire European arrest warrant."

Puigdemont entered Germany on his way back from Finland to Belgium, where he had been living in self-imposed exile.

(Additional reporting by Sonya Dowsett in Madrid; Editing by Alison Williams and Andrew Roche)

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Reuters