A German court has rejected an extradition request for Catalonia's former leader Carles Puigdemont on the charge of rebellion for his role in the campaign for the region's independence.

The court agreed to release Mr Puigdemont on bail and said extradition to Spain was possible on the lesser charge of misuse of public funds.

The former Catalan leader was arrested as he entered Germany last month on a Spanish-issued arrest warrant.

The ruling means Mr Puigdemont, who fled Spain five months ago for Belgium after Spanish Prime Minister Mariano Rajoy dismissed his regional administration, cannot be tried for rebellion in Spain once extradited on the lesser charge, a German court spokeswoman said.

She added: "The court must now decide if extradition for embezzlement is a possibility,

"If that is the case, and Mr Puidgemont can be extradited for embezzlement of public money, then a prosecution for rebellion is not possible."

A Spanish government spokeswoman said earlier that Spain respects the German court's decision.

The German court said the rebellion charge Mr Puigdemont faced in Spain was not a criminal offence in Germany, while the violence component that would justify a high treason charge was also lacking.

"The actions for which the subject is being prosecuted would not be criminal under German law," the court spokeswoman said.

The charge of rebellion can bring up to 25 years in prison in Spain.

The German court set bail at €75,000

"There is a risk of flight," the court said in its explanation of its decision to grant bail.

"But since extradition on rebellion charges is impermissible, the risk of flight is substantially lessened."

Mr Puigdemont entered Germany on his way back from Finland to Belgium, where he had been living in self-imposed exile.