The 54-year-old writer and university professor was honoured "for his long and non-violent struggle for fundamental human rights in China," Norwegian Nobel Committee chairman Thorbjoern Jagland said in his announcement.

"The Norwegian Nobel Committee has long believed that there is a close connection between human rights and peace," he added.

Liu was sentenced last December to 11 years behind bars for subversion, following the 2008 release of "Charter 08", a manifesto for reform signed by more than 300 Chinese intellectuals, academics and writers.

He is one of only three people to win the Peace Prize while in prison, after 1991 laureate Aung San Suu Kyi of Myanmar and German pacifist Carl von Ossietzky, who was in a Nazi jail when he won in 1935.

Following Friday's announcement, US President Barack Obama, the 2009 Peace laureate, called for Liu's release, as did his Secretary of State Hillary Clinton.

Several European governments and human rights groups including Amnesty International and Human Rights Watch joined the calls for him to be freed.

Two other former Peace Prize winners, the Dalai Lama and Lech Walesa of Poland, also hailed Liu's win and called for his release.

China, however, reacted furiously, calling the award "blasphemy" and a violation of the principles of the Peace Prize.

China's reaction raised concerns of a crackdown on other pro-democracy activists, but Jagland insisted that was no reason not to speak about the country's human rights violations.

Liu, who has been detained several times, was a key figure in the pro-democracy student movement in China in 1989, which was brutally crushed by Chinese authorities and culminated in the Tiananmen Square crackdown.

China said Liu's award would damage relations with Norway at a time when the two countries are negotiating a trade agreement which Oslo hopes to sign by the end of the year.

But instead of ducking what could be a pending diplomatic row, Norwegian Prime Minister Jens Stoltenberg was among the first to congratulate Liu.

"Liu Xiaobo has been awarded the prize for defending freedom of expression and democracy in a way that deserves attention and respect," he said in a statement.

Meanwhile, Norway's ambassador to China, Svein O. Saether, was summoned to answer for the Nobel Committee's choice.

The Nobel Committee was unable to reach Liu to inform him of his win Friday, and in China, news of the prize was difficult to come by due to a vast censorship network blocking Internet keyword searches for "Nobel Peace Prize" and "Liu Xiaobo", and even the blocking of text messages containing the new laureate's full name.

China's official Xinhua news agency carried news of the prize in English and Chinese -- but only by headlining the government's angry reaction to it.

The laureate's wife, Liu Xia, said she was "so excited" at the news, and thanked her husband's supporters including the exiled Tibetan spiritual leader the Dalai Lama.

She told AFP police had advised her that they would take her to the northeastern province of Liaoning, where Liu is imprisoned, so that she could tell him on Saturday of his Nobel win.

UN Secretary General Ban Ki-moon called Liu's Nobel "a recognition of the growing international consensus for improving human rights practices and culture around the world."

And the European Union's foreign policy chief Catherine Ashton said she hoped the jailed dissident would be able to travel to Oslo on December 10 "to receive his prize in person", worth 10 million Swedish kroner (1.49 million dollars, 1.09 euros).

Liu's win, however, also met with some criticism even within China's democracy movement. Wei Jingsheng, another senior figure, said others deserved the Nobel Peace Prize more than Liu, calling him a moderate willing to work with Beijing.

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