The exiled former leader of the Maldives vowed Friday to run for president after the Supreme Court quashed his conviction, dealing a major blow to the ruling regime.

Mohamed Nasheed, the country's first democratically elected president, has urged the government to respect the top court's shock decision to quash the convictions of nine dissidents and order the release of those serving jail sentences.

On Friday he told AFP the decision cleared the way for him to return to the Maldives, a south Asian atoll nation known as a honeymooners' paradise.

"I can contest and will contest," he told AFP in Colombo.

"We must set up proper procedures for inclusive, free and fair elections with full international observation."

Nasheed was barred from contesting any election in the Maldives after the controversial 2015 conviction on a terrorism charge widely criticised as politically motivated.

He has urged the government to respect the top court's shock decision to quash the convictions of nine dissidents and order the release of those serving jail sentences.

The court said the "questionable and politically motivated nature of the trials of the political leaders warrant a retrial".

The ruling brought opposition activists onto the streets in celebration, sparking clashes with police who fired tear gas to disperse the crowd.

It threatens to isolate President Abdulla Yameen, who has faced previous unsuccessful opposition attempts to impeach him for alleged corruption.

The Maldives' popular image as an upmarket holiday paradise has been severely damaged by a major crackdown on dissent under Yameen, who has overseen the jailing of almost all the political opposition.

Nasheed's Maldivian Democratic Party (MDP) welcomed the court's ruling, which it said "effectively ends President Yameen's authoritarian rule".

Nasheed, a charismatic and high-profile campaigner against climate change, was convicted in 2015 on a terrorism charge and sentenced to 13 years in jail.

In 2016 he was granted prison leave for medical treatment in London, where he secured political asylum.

A UN panel has ruled that his imprisonment was illegal and ordered the regime to pay him compensation.

The UN's rights agency on Friday urged the Maldives government to respect the court's decision and release those still in jail.

The court also annulled the expulsion of 12 legislators who had defected from Yameen's party and restored their seats, giving the opposition a majority in the 85-member parliament.

Police have said they will implement the court's decision that those political prisoners being held in jail should be freed pending retrials, although it remains unclear when this will happen.

In a sign of mounting tensions, the government sacked the country's police chief overnight, saying Yameen had been unable to contact him.

"If the situation gets out of hand, the government could declare a state of emergency," a military source told AFP Friday on condition of anonymity.

Streets in the Maldives, a nation of 340,000 Sunni Muslims, was relatively empty on Friday.

Witnesses said police had stopped dozens of activists from gathering in the main square of the capital Male after Friday prayers.