Carles Puigdemont released on bail by German court

Former Catalan leader Carles Puigdemont | Emmanuel Dunand  AFP via Getty Images

But meanwhile, Puigdemont can leave custody if he fulfils court-imposed conditions including a payment of 75,000 euros ($92,000).

Spanish Justice Minister Rafael Catala said Madrid "respected" the German court's decision to rule out the rebellion charge from the extradition request, but conceded that "some judicial decisions please us; others less so".

Puigdemont's German lawyer said the separatist politician was arranging the transfer of the bail money to Germany.

German prosecutors have argued that the charge of rebellion is similar to Germany's offence of treason. The court said it would consider an extradition request based on allegations of corruption, though. "But since extradition on rebellion charges is impermissible, the risk of flight is substantially lessened".

Catalan parliament president Roger Torrent described Mr Puigdemont's conditional release as "very good news" on Twitter.

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Puigdemont had proposed Sanchez - his No. 2 in the Together for Catalonia party - last month, but Spain's Supreme Court refused to free him to attend a parliamentary session.

He has been living in Belgium since fleeing Spain to escape arrest, and has been held at a prison in Neumuenster.

Also Thursday, Spanish police arrested Josep LluĂ­s Trapero, the former head of the Catalan police force, for his alleged role in the independence bid.

The Spanish government's quelling of the October 1 independence referendum drew worldwide condemnation and outrage, with footage of national police officers and members of the Civil Guardia seizing ballot boxes and violently dispersing voters going viral on social media.

He then came under pressure when central authorities urged the regional police to stop the October 1 referendum banned by Spanish courts.

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