HONG KONG—An outspoken newspaper mogul and advocate for democracy in Hong Kong will have to return to jail after a court suspended his bail in a case that is fueling tensions between Beijing and the city’s judiciary.

Prosecutors had requested an emergency hearing after a Hong Kong court allowed Jimmy Lai, who is charged with fraud and national security violations, to be released on $1.29 million bail last week and put under house arrest. He was the first defendant accused under the new national security law to be released on bail.

On Thursday, the city’s highest court ruled that he would have to return to prison pending a Feb. 1 review of the threshold for granting bail under the new law, which will be conducted by an appeal committee made up of three judges.

The case is being closely watched by Beijing. On Saturday, the People’s Daily, a newspaper seen as a mouthpiece for China’s Communist Party, called the decision to grant bail unbelievable, saying in a commentary that the bail conditions were disproportionate to the damage to national security that could be caused by Mr. Lai—who it branded as “notorious and extremely dangerous.”

Mr. Lai, who arrived for the hearing Thursday holding a Bible and flanked by reporters, is a prominent Hong Kong entrepreneur who built a successful clothing brand before founding Apple Daily, a newspaper that openly criticizes China’s Communist Party and pro-Beijing figures in Hong Kong. He appeared regularly at pro-democracy protests in the city, at times at the front of processions.

This post first appeared on wsj.com

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