MANILA, July 10 (Reuters) - Philippine left-wing leader Crispin Beltran was freed from a state hospital on Tuesday after being arrested more than 16 months ago on suspicion of plotting to overthrow President Gloria Macapagal Arroyo.

Earlier in the day, a Manila court dropped a case of rebellion against Beltran filed two decades ago, the only charges keeping him in custody.

In June, the Supreme Court ruled that charges against Beltran and five other congressman in connection with the alleged plot against Arroyo were politically motivated and ordered them freed.

"We're very happy," Beltran told Reuters by telephone minutes before he walked free, welcomed by fellow left-wing lawmakers and dozens of supporters who had waited for hours for the court's orders to be brought to the hospital.

"This is a sweet, total and complete vindication. We were proven right. It showed how repressive this government was, how it has been abusing its powers to trample upon the basic rights of our people."

Arroyo's legal adviser said the government was not happy over the court's decision to dismiss the case and order Beltran free.

"Of course, this is a setback," said Sergio Apostol, adding that he would leave it to government prosecutors to appeal against the decision.

Police arrested Beltran at his house in Bulacan province, north of the capital Manila, on Feb. 26 last year, a day after Arroyo declared a state of emergency to quell what she said was a planned mutiny by rogue soldiers.

Beltran was initially held at national police headquarters but was transferred to the state hospital after two months due to a heart condition.

Five other left-wing members of the lower house of Congress were also accused of conspiring with rogue soldiers to topple the Arroyo government, but escaped arrest after they took refuge in the legislature building for 71 days, until they were allowed to post bail.

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