A Chinese blogger sent to a labour camp for posting a joke about politician Bo Xilai was denied compensation by a court on Thursday, his lawyer said, even though his conviction had been overturned.

Fang Hong was condemned to 12 months in a labour camp in the Chinese megacity of Chongqing after he posted a scatological joke online about the city's then top official, who fell from grace in a spectacular scandal last year.

Fang served out his sentence but a court in Chongqing later overturned his conviction, ruling that police did not have enough evidence to detain him, state-run news agency Xinhua reported.

The blogger launched a lawsuit seeking more than 360,000 yuan ($58,000) in compensation for psychological suffering incurred during his detention, but the case failed on Thursday, his lawyer Mei Chunlai told AFP.

"The court rejected the request to apologise and give psychological compensation," Mei said in a brief statement.

China's re-education through labour system, which permits police to hand out sentences of up to four years without trial, was established in the 1950s to punish minor criminals, but has also been used to suppress political dissidents.

Bo is awaiting criminal trial after his wife was convicted of murdering a British businessman, and Chinese media have recently highlighted abuses of the system during the politician's tenure, feeding into calls for its abolition.

Chongqing's mayor said last week that the city had eliminated the influence of Bo, but Fang's lawyer said that little had changed in the city since Bo and his former police chief Wang Lijun were removed from their posts.

"Before and after Bo and Wang, the re-education through labour committees in Chongqing are still mighty... the legal system still has no way of placing sufficient restrictions on the system," he said.