BEIJING - One of China's best known dissidents, Liu Xiaobo, has been formally arrested on suspicion of inciting subversion, following his detention late last year for promoting a petition calling for an end to one-party rule.

The move brings one of the most prominent critics of the ruling Communist Party a step closer to trial, and it will be a blow to supporters and human rights groups who had hoped he would be released after China passed the politically sensitive 20th anniversary of the 1989 pro-democracy Tiananmen protests.

State news agency Xinhua said on Wednesday prosecutors approved Liu's arrest by Beijing police on Tuesday for alleged agitation activities aimed at subversion of government and overthrowing of the socialist system.

Liu has been engaged in agitation activities, such as spreading of rumours and defaming of the government, aimed at subversion of the state and overthrowing the socialism system in recent years, Xinhua quoted police as saying in a statement.

If indicted and convicted, the 53-year-old dissident could be sentenced to a maximum of 15 years in prison, according to Mo Shaoping, an attorney who has been barred from representing Liu because the lawyer also signed the Charter 08 petition that the dissident helped launch.

It's still in the investigation stage, Mo said.

Xinhua reported that Liu confessed to the charge in preliminary police investigation.

But his family and friends have said he has been unfairly persecuted for peaceful expression.

Xiaobo told a Beijing Public Security Bureau officer to tell me not to worry too much ... (but) I'm very worried. He has already been arrested. They will convict and sentence him, his wife, Liu Xia, told Reuters by telephone.

Liu Xiaobo has been allowed to meet his wife twice since he was taken into custody last December. He was visibly thinner but appeared healthy and calm.

Liu has been a thorn in the government's side since 1989 when he joined a hunger strike in support of student protesters days before the army crushed the pro-democracy movement centred on Tiananmen Square on June 4 that year.

Late last year, he was among 303 dissidents and rights activists who launched Charter 08, a petition calling for the dismantling of one-party rule and creation of multi-party democracy. About 9,000 people have signed the petition since.

Liu Xiaobo is expressing his right to free speech. This is a basic right ... the Communist Party simply shouldn't be detaining people like this, Jiang Qisheng, a dissident who also signed Charter 08, said in an interview in February.

Liu was jailed for 20 months in the wake of 1989 and again in the 1990s, spending three years at a labour camp and eight months under virtual house arrest.

But he has remained a vocal and acerbic critic of the government, often publishing essays on overseas Chinese websites. He also helped found the Independent Chinese PEN group, which has campaigned against censorship and political controls.

(Additional reporting by Chris Buckley in Beijing and Lucy Hornby in Shanghai; Editing by Ken Wills and Sanjeev Miglani)

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