YANGON, Nov 20: Myanmar's ruling junta has freed its second most prominent political prisoner, leader of the 1988 student democracy protests Min Ko Naing, in a move analysts said could be a major step towards political reform.

"I feel as if I have awoken from dreamland and I've just started to open my eyes," Min Ko Naing told Reuters at his Yangon home after being freed from almost 16 years in jail and flown back to the capital from Sittwe, 560km to the west.

The release of Min Ko Naing, who had been in jail since March 1989, was one move Myanmar experts had been looking for as they sought to measure the significance of the purge of Prime Minister Khin Nyunt and his intelligence apparatus last month.

The other was the release from house arrest of democracy icon and Nobel Peace Prize laureate Aung San Suu Kyi.

She remained under house arrest at her lakeside villa in Yangon despite the junta's dramatic announcement it was freeing nearly 4,000 people held "inappropriately" by Khin Nyunt's now dismantled intelligence apparatus.

Members of her National League for Democracy were among those filtering back to their homes from jails around the country in the wake of the mass release, but there was no word on whether Suu Kyi's deputy, Tin Oo, had also been freed from house arrest.

NLD spokesman U Lwin said the mass release generated hope Suu Kyi might be allowed to move out of the house, where she is without a telephone and needs military permission to see anyone. NLD officials were reluctant to confirm the names of colleagues returning home.

Democracy activists celebrated Min Ko Naing's freedom. "Min Ko Naing is to the student movement in Burma what Aung Sang Suu Kyi is to the entire country," said Debbie Stothard, coordinator of the Alternative ASEAN Network on Burma, based in Bangkok.

The NLD welcomed the military's decision and hoped more of its members would be freed.