Wu Chi-wai, 63, who holds a British National (Overseas) passport, was held shortly after landing at Heathrow airport last week and his lawyer told AFP that he was due to be removed on Wednesday.
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.
His lawyer Paul Harris told AFP on Monday that Wu was "now admitted as a visitor for six months" after the "Home Office informed him this afternoon".
"This is what should have happened last Wednesday when he arrived," the lawyer said.
The Home Office told AFP Monday it "remains steadfast in its support for members of the Hong Kong community in the UK" but does not "routinely comment on individual cases".
Hong Kong Watch rights group confirmed Wu has been granted six months' leave to remain and had the right to apply for a visa to stay longer.
Its policy director Megan Khoo said in a statement that Wu "should never have faced the prospect of removal back to the city that jailed him," calling the decision "the right outcome".
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