The author, a portly 57-year-old whose adopted pen name Mo Yan means "don't speak", said he had read some of Liu's literary criticisms in the 1980s, but that he had no understanding of Liu's work once it had turned towards politics.

"I hope he can achieve his freedom as soon as possible," Mo told reporters on Friday in his hometown of Gaomi in the northern province of Shandong, in bold remarks likely to embarrass Beijing which has lauded his victory and denigrated Liu's prize.

Liu should be able to research his "politics and social system", Mo said without elaborating

A number of dissidents and other writers have said Mo was unworthy of winning as he had shied away from commenting on Liu's plight. They have also denounced him for commemorating a speech by former paramount leader Mao Zedong.

But Mo, whose real name is Guan Moye, shot back at those criticisms.

"I believe that the people who have criticized me have not read my books," he said. "If they had read my books they would understand that my writings at that time took on a great deal of risk and were under pressure.

"Many of the people who have criticized me online are Communist Party members themselves. They also work within the system. And some have benefited tremendously within the system," he added.

"I am working in China," he said. "I am writing in a China under Communist Party leaders. But my works cannot be restricted by political parties."

Mo, who was once so destitute he ate tree bark and weeds to survive, is the first Chinese national to win the $1.2 million literature prize, awarded by the Swedish Academy.

He is best known in the West for "Red Sorghum", which portrays the hardships endured by farmers in the early years of communist rule and was made in a film directed by Zhang Yimou. His books also include "Big Breasts and Wide Hips" and "The Republic of Wine".

Prominent dissident Hu Jia, a close friend of Liu's, praised Mo's apparent sudden change of heart.

"What has happened in the last 24 hours has changed him. A Nobel prize, whether for peace or for literature, bestows on one a sense of wrong and right," Hu told Reuters.

China, long used to wringing its hands at perceived snubs or insults by the Nobel organizers, has worked its propaganda machine into overtime to hail Mo's win as a breakthrough for the entire nation, and recognition of its place as a great country.

Senior Communist Party official and China's propaganda chief Li Changchun congratulated Mo, state media reported, saying he hoped "Chinese writers will focus on the country's people in their writing and create more excellent works that will stand the test of history".

But the mention of Liu by Mo, a vice-chairman of the government-backed Chinese Writers' Association, could make things awkward for the Chinese authorities, who jailed Liu for 11 years in 2009 for inciting subversion of state power.

Chinese Foreign Ministry spokesman Hong Lei repeated government criticism of Liu's award, saying it amounted to "grave meddling in China's internal affairs and judicial sovereignty".

COUNTRY BOY

Mo's interest in literature dates back to his childhood in Gaomi. When he was six, he was an avid reader of Chinese classics, said Mo's elder brother Guan Moxin, 62. The youngest of four children, Mo loved telling stories.

But Mo's farmer father and brother, who are still living in the dusty, hardscrabble village in Gaomi where Mo grew up, had no idea they had a Nobel Literature Prize winner in their midst.

"What are the chances that a country boy without anything to his name could become a great author?" Guan Moxin told Reuters.

"He is just a man from this remote land, and this poor family; he is not from some big city."

Mo, already hugely popular in China, has become something of a celebrity in Gaomi. Thrilled residents set off fireworks the night Mo's award was announced. Reporters started streaming into the nondescript town. A hotel put up a digital banner congratulating Mo.

"I couldn't quite believe it. It took me awhile before I could believe it. It seemed so impossible. We were all (the village) celebrating, lighting firecrackers," Guan Moxin said.

Mo's books reflect the tumult of modern China. He has credited his early suffering for inspiring his works, which tackle corruption, decadence in Chinese society and rural life.

"When he was little at school he was very naughty," Mo's 90-year-old father, Guan Yifan, told Reuters. "But afterwards he had to stop and do farm work. At the time we had to eat wild vegetables, and he had to go and dig wild vegetables."

(Additional reporting by Sui-Lee Wee, Terril Yue Jones and Ben Blanchard in BEIJING; Editing by Nick Macfie)

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