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BEIJING | Sun Aug 23, 2009 2:17pm IST

BEIJING (Reuters) - A pioneering Chinese legal rights advocate, who had been detained for more than three weeks and accused of tax evasion, was released on Sunday but might still face prosecution, he and his lawyers said.

Xu Zhiyong, co-founder of the Open Constitution Initiative, or Gongmeng, had been out of contact since he was seized from his home by security officials at dawn on July 29.

Xu, surrounded by friends and supporters after his release, said: "I think this outcome was the result of pressuring and urging from many friends and many quarters. We'll have to see what it means, and we can't entirely exclude the possibility of prosecution. But if that happens, I'll defend myself vigorously."

Zhou Ze, one of Xu's attorneys, said the investigation might continue.

"In legal procedure, all it means is that Xu Zhiyong has been judged not to be a threat to society, and we don't know what will become of the case."

If tried and found guilty, Xu could be jailed for up to seven years under the tax evasion charge, his lawyers have said.

"I don't know how the police and prosecution will decide what to do, but we believe there's no evidence to constitute the crime of tax evasion," Zhou said.

The government has been tightening its grip on dissidents and human rights campaigners this year, when several sensitive anniversaries have made the ruling Communist Party especially wary of challenges to its authority.

In June, Beijing marked 20 years since the crackdown on protesters in Tiananmen Square, and in October the country celebrates the 60th anniversary of the founding of the People's Republic of China.

Xu's Gongmeng group, comprising scholars, lawyers and rights advocates, has annoyed Beijing with a series of high-profile cases, including providing legal aid to victims of tainted baby milk formula and issuing a report criticising the handling of unrest across the Tibetan plateau last year.

Xu, in his late 30s, gained national attention in 2003, when he took up the cause of Sun Zhigang, a graphic designer who died after being beaten in a detention centre in far southern China.

Li Xiongbing, a fellow activist with the Open Constitution Initiative, said Xu's release was a hopeful sign the case might be dropped altogether.

"In Chinese law, the authorities can continue the investigation, but in practice it means he's very unlikely to be prosecuted."

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