Few nations heed Beijing’s boycott as committee calls for winner to be freed and tells China: citizens have right to criticise.

It was not a special chair. Like the six others next to it on the dais in the cavernous central assembly room of Oslo’s city hall, its frame was of plain varnished hardwood and its fabric of powder blue, white cross-stitches picking out a delicate pattern of flowers and stars and, across the back, three swans flying against a snowy sky.

Unlike its neighbours, though, which held the solid, smartly turned-out forms of the chairman and members of the Norwegian Nobel committee, it stayed empty. For the first time since 1936, the Nobel peace prize could not be presented today either to its laureate or, as the prize rules require, to a close relative.

“No medal or diploma will be presented today,” the committee’s chairman, Thorbjorn Jagland, began, opening a simple ceremony of music and readings during which the 1,000-strong audience of diplomats, dissidents-in-exile and Norway’s great and good several times climbed to their feet in prolonged applause. “But this fact alone shows that the award was necessary and appropriate. We congratulate Liu Xiaobo on this year’s peace prize.”

Nominated for his “long and nonviolent struggle for fundamental human rights in China”, Liu, a 54-year-old critic and writer, is serving an 11-year prison sentence for inciting subversion after coauthoring Charter 08, an appeal for democratic reform. His wife, Liu Xia, has been under house arrest since the award was announced last month.

Despite China’s fury at the decision, which it branded an insult to the peace prize, and warnings of “consequences” for nations that attended, some 50 of the 65 embassies in Oslo were represented today. Several, including Serbia, Ukraine and the Philippines, which had said they would stay away, appeared to have been persuaded to change their minds.

Arguing that the connections between freedom of expression, democracy and peace were now proven, Jagland said China’s treatment of Liu showed that despite its astonishing economic success, for which “it must be given credit”, Beijing must learn to take criticism. Articles 35 and 41 of China’s own constitution, he noted, allow citizens “freedom of speech, of the press, of assembly, of association” as well as “the right to criticise and make suggestions regarding any state organ or functionary”. To some degree, he said, China’s size and economic might mean it is “carrying the fate of mankind on its shoulders”.

Standing beside a blown-up portrait of a bespectacled and smiling Liu, Jagland added: “Many will ask whether China’s weakness – for all the strength it is currently showing – is not manifested in the need to imprison a man for 11 years merely for expressing his opinions on how his country should be governed.”

Liu, he said to sustained clapping, “has exercised his civil rights. He has done nothing wrong. He must be released.”

At the end of his speech, he announced that since neither the Nobel diploma nor the winner’s medal could be presented, he would “place them on the empty chair”. Embossed in gold with the letters LXB, they stayed there for the remainder of the hour-long ceremony.

Outside, queuing in temperatures of -8C before the event, guests – who included the speaker of the US House of Representatives, Nancy Pelosi, and a house foreign affairs committee member, Chris Smith – were entertained by the Oslo police band playing, perhaps incongruously, Yuletide favourites: Jingle Bells, Santa Claus Is Coming to Town. Less tunefully, but equally volubly, a small group of Chinese pro-democracy campaigners from countries as far-flung as Hong Kong and Australia chanted “Free Liu Xiaobo now” and “Democracy for China”. There was no sign of a pro-China demonstration reportedly called by the Chinese embassy in Oslo.

Today was, said Li Qing Feng, a 50-year-old scientist from Copenhagen, “a very, very important day. Maybe not in the short term; you only have to look at the authorities’ reaction to this to see their stupidity. That won’t vanish overnight. But long-term, I think we will look back and say, this was the day progress and democracy in China really took a step forward.”

The prize has on occasion been collected by laureates’ family members. Soviet scientist Andrei Sakharov’s diploma, medal and cheque – the prize today is worth £1m – were presented to his wife, Elena. Solidarity leader Lech Walesa’s wife, Danuta, performed the same role. In 1991, it was Aung San Suu Kyi’s son.

But the only other time no one has been able to collect it was in 1936, when the German pacifist and journalist Carl von Ossietzky won the award. Hitler had banned any German national from accepting a Nobel prize, and despite courageously letting it be known from his hospital bed that he would defy the führer if he could, Von Ossietzky died 18 months later aged 48.

The actor Liv Ullmann read the moving address made by Liu to the court that tried him for subversion last year. The former literature professor, who has dedicated the award to the “lost souls” of the 1989 Tiananmen Square uprising, told his judges on 23 December 2009 that he had no hatred for the police who arrested him, the prison officers who guarded him, or those who would sentence him.

“Hatred can rot away at a person’s intelligence and conscience,” he said. “The enemy mentality will poison the spirit of a nation, incite cruel mortal struggles, destroy a society’s tolerance and humanity, and hinder a nation’s progress towards freedom and democracy.”

He remained hopeful: “I, filled with optimism, look forward to the advent of a future, free China. For there is no force that can put an end to the human quest for freedom, and China will in the end become a nation ruled by law, where human rights reign supreme.”

The most emotional passages of the address were addressed to his wife. “Your love is the sunlight that leaps over high walls … stroking every inch of my skin, warming every cell of my body,” Ullmann read, “allowing me always to keep peace, openness and brightness in my heart, and filling every minute of my time in prison with meaning.”

Yu Zhang, Stockholm-based coordinator of the Independent Chinese PEN Centre, had a tear in his eye at that. “I met Liu twice,” he said after the ceremony. “We had dinner twice together. But we spoke by email almost daily. He is honest, tolerant, and understanding – a fine man, and a good friend. And he’s one hell of a defender of human rights. You’ll see, this is a big, big day – an important day. Not now, but in years to come.”