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BEIJING | Fri Sep 19, 2008 10:15am IST

BEIJING (Reuters) - A "house" church in China is seeking to sue a local religious affairs authority for shutting down a service in what activists called a breakthrough challenge.

The Qiyu Blessings Church in the southwest province of Sichuan is one of thousands of once-banned self-organised Christian groups the ruling Communist Party warily tolerates as it encourages believers to join larger state-sanctioned churches.

The church leader now wants to take the Shuangliu County Bureau of Religious Affairs to court for stopping a service in early May, the New York-based group Human Rights in China reported in an email on Friday.

"This is a test case about the extent of the religious freedom that the Chinese government says its people enjoy," said Sharon Hom, executive director of the group.

The litigant, Wang Yi, said by telephone that this appeared to be the first time a house church had sought to press its rights in court and have a ban declared illegal.

"I hope that this will be a big event for house churches," said Wang, a law lecturer in Chengdu, the provincial capital of Sichuan. "It's a way for us to encourage dialogue with the government and make religious affairs bureaux act within the law."

China says it respects freedom of worship, but critics say in practice believers face harassment and sometimes detention. China has about 40 million active Christians, with numbers divided between the state-sanctioned and the underground and "house" churches.

Wang's congregation of 40 or so usually gathers in a rented room in Chengdu, where it is generally tolerated by authorities.

But when in May it tried to worship in a hotel in Shuangliu, on the city's rural outskirts, officials stopped the service. The officials also took bibles, said Wang.

Since then, their services in the city have not been stopped.

This was typical of the government's tense relationship with the house churches, said Wang.

In recent years, officials have encouraged these churches to register and accept some supervision in return for a degree of freedom. But some house church activists say state supervision violates their principles.

"Generally, they (officials) don't interfere if we restrict ourselves to our usual space for worship," said Wang. "But if we try to move out for worship or training, then they step in to stop us. But we want them to act within the law, not arbitrarily."

Wang said he had sent his writ to a Chengdu court and was waiting on its decision whether to allow a hearing. He said he was not hopeful. An earlier administrative appeal was rejected.

With the Beijing Olympic Games in August, the government has been especially guarded against religious activists.

During the Games, plainclothes police detained a Christian activist, Hua Huiqi, to stop him attending a church service in Beijing attended by U.S. President George W. Bush.

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