A group of eminent Chinese Communist party elders has issued a bold call to end the country's wide-ranging restrictions on free speech, just days after the government reacted angrily to the awarding of the Nobel peace prize to imprisoned dissident Liu Xiaobo.

In an open letter posted online, the retired officials state that although China's 1982 constitution guarantees freedom of speech, the right is constrained by a host of laws and regulations that should be scrapped.

"This kind of false democracy of affirming in principle and denying in actuality is a scandal in the history of democracy," said the letter, which was dated Monday and widely distributed by email.

Wang Yongcheng, a retired professor at Shanghai's Jiaotong University who signed the letter, said it had been inspired by the recent arrest of a journalist who wrote about corruption in the resettlement of farmers for a dam project.

"We want to spur action toward governing the country according to law," Wang said in a telephone interview.

"If the constitution is violated, the government will lack legitimacy. The people must assert and exercise their legitimate rights," he said.

Coming on top of Liu's Nobel prize, the letter further spotlights China's tight restrictions on freedom of speech and other civil rights, although Wang said the two events were not directly related. Work on the letter began several days before the prize was awarded, and drafters decided against including a reference to Liu out of concern the government would block its circulation.

Liu, a 54-year-old literary critic, is in the second year of an 11-year prison term after being convicted of inciting subversion over his role in writing a 2008 manifesto for political reform.

China's government has denounced Liu's prize as an attempt to interfere in its political and legal systems and said it would harm relations with Norway, where an independent committee presents the Nobel peace prize each year.

The letter called on the National People's Congress, China's legislature, to scrap restrictions on publications and implement a system of post-facto review as many other nations did long ago.

"Our current system of censoring news and publications is 315 years behind Britain and 129 years behind France," the letter said.

Censorship has become so reflexive and restrictive that passages urging political reform were expunged from official media reports of speeches by the prime minister, Wen Jiabao, the letter said. Wen has drawn attention in recent weeks with a series of unusually direct calls for the communist system to evolve.

"Not even the nation's premier has freedom of publication," the letter said.

China implements overlapping and usually unwritten rules and regulations on what can or cannot be published, but the final call is made by the Communist party's shadowy central propaganda department. Members of the department regularly notify editors about what topics are taboo, usually by telephone to avoid leaving a paper trail, with the list changing constantly depending on events.

The letter described the department as an "invisible black hand" and questioned what right it had to override both the government and the premier.

The 23 signatories to the letter include Li Rui, the former secretary to revolutionary leader Mao Zedong, and other retired high officials in state media and the propaganda apparatus who were once themselves responsible for enforcing strict censorship.

The government insists it guarantees freedoms and points to vast improvements in incomes and quality of life among its citizens as evidence that the one-party authoritarian system is best suited to the country's realities.

Calls to the National People's Congress news office were not answered today.

Li, who is in his 90s, is in hospital and could not immediately be reached for comment, nor could most other signatories to the letter.

Members of the group have signed other letters in the past, including one addressed to the Beijing leadership in early 2009 that voiced support for the government's $586bn (£358bn) economic stimulus package but warned that without transparency it could be frittered away by corrupt officials.