By Sonya Dowsett
MADRID (Reuters) - Spain's Supreme Court on Tuesday withdrew an international arrest warrant for Catalonia's former leader, in self-imposed exile in Belgium after an illegal independence referendum, in a move to bring his case back solely into Spanish jurisdiction.
Carles Puigdemont and four of his cabinet members went to Belgium when Madrid imposed direct rule on the wealthy northeastern region after an Oct. 27 declaration of independence by his local government.
The decision to withdraw the warrant leaves Puigdemont without an international legal stage on which to pursue his independence campaign. He is likely to be detained if he returns to Spain, pending investigation on charges of sedition, rebellion, misuse of public funds, disobedience and breach of trust.
The battle between Madrid and Catalan secessionists has hurt the Spanish economy and prompted thousands of companies to shift their legal headquarters outside of Catalonia, which accounts for a fifth of Spain's economy.
On Tuesday, campaigning began for the Dec. 21 Catalan regional election that Madrid called in an attempt to resolve the crisis by installing an administration in favour of Spanish unity.
However, pro-independence parties view the election as a proxy vote on a split from Spain. Polls show both sides neck and neck on a high turnout.
A Spanish court issued the international arrest warrant for Puigdemont on Nov. 3.
On Monday, a Spanish court declared it would keep Puigdemont's former vice president Oriol Junqueras in custody in Madrid while he is investigated for his role in preparing the independence referendum.
Removing the international warrant takes Belgium's legal system out of Puigdemont's case. There could have been months of legal wrangling if appeals against his extradition were moved through the Belgian courts.
Investigating magistrate Pablo Llarena of the Supreme Court said it was important that just one legal entity oversaw proceedings against the former independence leaders to ensure they get equal treatment.
The Belgian prosecutor said authorities were analysing the development but could not comment further at this stage.
Puigdemont's lawyer Paul Bekaert said legal proceedings in Belgium were now over. Puigdemont would be arrested if he went to Spain, he said.
Puigdemont's party, Junts per Catalunya (Together for Catalonia), could not be immediately reached for comment.
The Spanish court said Puigdemont and his cabinet members had shown a willingness to return from Belgium to Spain to take part in the election.
Puigdemont gave a televised address from Belgium at a campaign rally on Monday, telling the central government in Madrid that his party would win the election.
"I'm very sorry I can't be with you now," he said to cheers from members of his pro-independence Junts per Catalunya party, which organised the rally.
(Additional reporting by Clement Rossignol in Brussels and Paul Day in Madrid; Editing by Janet Lawrence)