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By Brenna Hughes Neghaiwi

ZURICH (Reuters) - A Swiss federal court has dismissed the asylum appeal of a woman convicted in Spain of supporting the Basque separatist group ETA, but said she was now free to remain in Switzerland after Madrid dropped her sentence.

The case of Nekane Txapartegi, who said she was tortured while in custody in Spain before fleeing in 2007, has drawn considerable attention in Switzerland, with members of a "Free Nekane" movement staging rallies in Zurich and other cities.

The United Nations' special rapporteur on torture and Amnesty International had also urged Swiss authorities not to extradite Txapartegi to Spain.

On Friday the Swiss court said the asylum issue was no longer relevant because Spain's High Court had ruled that her sentence - initially 11 years in jail, later reduced to 3-1/2 years - had reached its statute of limitations.

"As with every European citizen, Ms. Txapartegi may stay in Switzerland within the rules of free movement," a spokesman for the State Secretariat for Migration said.

Switzerland is not in the European Union but EU citizens can settle there provided they are in gainful employment or can prove they have sufficient funds to support themselves.

Swiss authorities arrested Txapartegi in Zurich in April 2016 after they discovered she had been living under an assumed name in Switzerland since 2009. They agreed in March this year to extradite her but freed her in September after the Spanish decision to drop her jail sentence.

Txapartegi had told Swiss authorities she was tortured into confessing support for ETA while in Spanish custody. The Swiss Federal Office of Justice said at the time she "could "not credibly show that she was actually tortured".

On Friday the Swiss court said that, given the conditions prevailing in Spain at the time of her arrest, she may well have been subjected to physical and psychological abuse, but said it no longer needed to evaluate her claims.

ETA, which killed more than 800 people over several decades and declared a permanent ceasefire six years ago, has been severely weakened after hundreds of its members were arrested and police seized several weapons stashes.

(Editing by Gareth Jones)

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