Nguyen Van Ly, in his early 60s, was convicted on charges of propaganda against the state and sentenced in 2007 to eight years' incarceration, a verdict that drew condemnation from diplomats and human rights groups.

His sentence was temporarily suspended for one year by a court on March 15, 2010, expiring a year later, to allow him to seek treatment for a brain tumour, with no official word on his subsequent status until Monday's re-arrest.

"It's true. This afternoon," said one source, who cannot be identified because of the delicate nature of the case in the communist country.

The United States and international rights groups have sought Ly's unconditional release, having feared he would be sent back behind bars.

Before the leave expired, a government spokeswoman said Ly would be returned to jail if his health was normal. In March, a relative of the priest said he was staying at a church compound in the Hue area of central Vietnam.

During his trial, prosecutors said Ly was a founding member of the banned "Bloc 8406", considered by analysts as the first organised pro-democracy coalition inside the country.

Amnesty has called Ly a prisoner of conscience who was arrested solely for the peaceful expression of his beliefs.

His arrest comes the day before prime minister Nguyen Tan Dung is expected to be named to a second term in office after consolidating his power, with activists predicting a tougher climate for dissidents.

Agence France Presse - July 26, 2011