Wu Chi-wai, 63, who holds a British National (Overseas) passport, was held shortly after landing at Heathrow before being admitted to the country, the South China Morning Post reported on Thursday, citing an unnamed source.
A spokesperson for the UK's Home Office told AFP authorities were working to resolve a paperwork issue, without disclosing further details.
Wu, a former lawmaker and leader of the now-disbanded Democratic Party, was released last month after serving four years and five months in prison for subversion convictions under a sweeping national security law imposed by Beijing in 2020.
Britain's BNO visa scheme, launched in 2021, was introduced in response to the security law, which came a year after Hong Kong's huge and sometimes violent democracy protests in 2019.
Since the scheme opened, more than 230,000 people have been granted a visa and over 170,000 have moved to Britain.
Britain "remains steadfast in its support for members of the Hong Kong community in the UK", the Home Office spokesperson said, adding that the detention was not related to Wu's conviction record in Hong Kong.
Rights group Hong Kong Watch said in a statement that it was concerned by Wu's detention.
He was eventually allowed to enter the UK on temporary admission "following a deeply alarming situation" at the airport, the group said.
Wu was told at the border his passport would be confiscated and he faced deportation back to Hong Kong within seven days, it added.
He was among 45 former pro-democracy activists convicted of conspiracy to commit subversion in an unofficial legislative election in 2020. Many of the convicted activists remain in prison.