By Joan Faus and Jordi Rubio

BARCELONA/ROME (Reuters) -A court in Sardinia was expected on Friday to release former Catalan separatist leader Carles Puigdemont from custody but order him to remain on the Italian island following his arrest there on sedition charges.

Spain wanted Puigdemont to be extradited but Catalonia’s regional chief criticized the government saying that Thursday’s arrest was a setback in attempts to reach reconciliation between Madrid’s wealthy Mediterranean region and Madrid.

Puigdemont in Catalonia was the leader of the vote for independence in Spain 2017. This was declared illegal by courts, and it triggered Spain’s worst political crisis since decades.

According to Spanish and Italian media, Puigdemont was already released from jail by a Sardinian court. He was ordered to remain on the island while awaiting a ruling on his extradition.

Agostinangelo Marrs, a Sardinian Puigdemont lawyer, said to Reuters that the court hadn’t yet made a decision. However, the state prosecutor claimed there was no compelling reason to lock him up.

Spanish Prime Minister Pedro Sanchez declared that “what is evident is Carles Puigdemont has to submit to (the actions of) justice.”

Sanchez declared that reconciliation was possible through dialogue, one week after talks were relaunched with Catalonia’s separatist government.

Pere Aragones (Catalonia’s regional head) said that the arrest had complicated this dialogue.

According to Pere Aragones, “Yesterday’s events show that Spain has not acted with good faith in European justice” and did not aid the settlement of the conflict.

A few hundred demonstrators gathered at the Italian consulate to wave Catalan separatist flags, chanting “Puigdemont the president” and “Free Puigdemont” after police had closed off the major street in Barcelona.

ARREST WARRANT

Puigdemont, 58, has been living in self-imposed exile in Belgium since late 2017 after Spain accused him of helping to organise the independence referendum.

After serving as a European Parliament member since 2019, Puigdemont was arrested by the Italian border police at Alghero Airport when he arrived to Sardinia, Italy for an event.

In March, the European Parliament removed his immunity.

Puigdemont could be sent to the Supreme Court for the same trial in which nine Catalan separatist leaders were sentenced in 2019 to lengthy imprisonments in connection with their 2017 attempts to seize Spain.

They were pardoned by the Spanish government in June. However, Puigdemont had to still face Spanish justice.

Although Puigdemont was under a European arrest warrant from Spain, his chief lawyer Gonzalo Boye told reporters in Brussels that there wasn’t any reason to hold him.

Italy’s Justice Ministry claimed that it is not involved in European arrest warrant procedures.