A former student leader of China's 1989 pro-democracy movement has been arrested on fraud charges, his family said on Wednesday, weeks before the 20th anniversary of the June 4 crackdown on Tiananmen Square protests.

The formal arrest of Zhou Yongjun, a leader of the Beijing Students' Autonomous Union in the 1989 protests, comes after months in secret detention following his return from exile in the United States, his family said.

Zhou is a permanent U.S. resident, relatives said, and his case could stoke contention between Washington and Beijing.

He was charged with fraud by police in his home city of Suining in southwest Sichuan province, said his brother, Zhou Lin, who spoke by telephone. Zhou Lin said his family received the written arrest notice on Wednesday morning.

Zhou Lin said he did not know details of the charge, which police had informally told the family about earlier.

Zhou Yongjun's partner, Zhang Yuewei, called the charge unfounded.

"He's been under secret detention for a long time, since he tried to enter China last year," she said, speaking from California, where the couple live.

"At first he was accused of spying and political crimes, but now they have switched to this financial fraud accusation."

Xing Lin, an officer in the Suining Public Security Bureau, said there was a "case involving Zhou," but refused to say any more, as did the officer in charge of economic crimes.

The U.S. State Department said it was troubled by reports of Zhou's arrest, had raised the issue with Chinese officials and that, contrary to Chinese practice, Zhou's family was not officially informed of his detention until Wednesday.

"We are disturbed," State Department spokesman Ian Kelly told reporters in Washington, saying the United States wanted China to ensure that any proceedings against Zhou be handled in a way "that is both transparent and consistent with Chinese law and international human rights norms."

Zhou, 41, was a law student who helped organise the mass movement demanding democratic reform that erupted on Chinese streets in 1989. He was on Tiananmen Square on June 4 that year as armed troops moved in to quash the protests, according to accounts from the time. Hundreds died in the crackdown.

He was one of three students behind one of best-known confrontations with the government, when they knelt before the Great Hall of the People, home of the parliament next to the Square, asking Premier Li Peng to accept a petition of demands.

After years in detention, Zhou fled to the United States in 1993. When he tried to return to China in 1998, he was sentenced to three years of "re-education through labour" and returned to the United States in 2002.

When he again tried to enter mainland China in September last year, he was detained when he crossed from Hong Kong to Shenzhen, his family said. He was recently moved to Suining.

"He wanted to see his father, who is old and sick, but I didn't want him to go," said Zhang.