Colombia's second-largest rebel group has taken another step in the direction of peace talks with the government by freeing a politician after holding him more than three months.

Fabio Ardila, a former mayor in eastern Colombia, was handed over to the International Red Cross on Thursday. His release by the National Liberation Army comes a week after the rebels freed a rice farmer in the same area near the Venezuelan border.

President Juan Manuel Santos praised the release, saying it brings the two sides closer to initiating peace talks that were announced in March but are frozen over the government's insistence the group releases all captives.

The move comes as a peace deal with the much-larger Revolutionary Armed Forces of Colombia is in limbo following its defeat in a referendum.