Ai, a world-renowned artist and China's most prominent dissident, and staff of his company performed Psy's famous horse dance in his Beijing studio and posted the video late on Wednesday to Chinese sites such as "Tudou", the equivalent of the blocked YouTube site.

Ai, 55, called the video "Caonima". "Caonima" means "grass mud horse" but the word, which sounds like a very crude insult, has also been taken on by Chinese Internet users, and by Ai himself, and featured in postings mocking the government's online controls.

"We only filmed for a bit over 10 minutes but we used a whole day to edit, and eventually put it online at midnight," Ai told Reuters.

"After we had uploaded it, a few hours later ... we found that a lot of people, tens of thousands, had already watched it. Now, in China, it has already been totally removed, deleted entirely, and you can't see it in China," Ai said.

Ai said Psy's Gangnam Style song and dance was a grass-roots expression of individualism that should be allowed in his country.

"Overall, we feel that every person has the right to express themselves, and this right of expression is fundamentally linked to our happiness and even our existence," Ai said.

"When a society constantly demands that everyone should abandon this right, then the society becomes a society without creativity. It can never become a happy society."

Ai, whose 81-day detention last year sparked an international outcry, has regularly criticized the government for what he sees as its flouting of the rule of law and the rights of citizens.

Last month, a court upheld a $2.4 million tax evasion fine against him, ending a long legal battle with the authorities. He can be jailed if he does not pay.

(Reporting by Maxim Duncan; Editing by Elaine Lies and Robert Birsel)

• A Permanent Economic Emergency