The death of Taktser Rinpoche marked more than the passing of a major figure from the heyday of the Tibetan independence movement because it comes amid growing concern about the Dalai Lama's health, and the diminishing possibility of any negotiated settlement of the Tibet issue.

"His death is likely to add a much-needed sense of urgency and seriousness to the dialogue process between China and the exiles," said Robbie Barnett, a Tibet expert at Columbia University in New York.

Taktser Rinpoche, who had been ill for several years, died in his home in Indiana on Friday, the Washington-based International Campaign for Tibet said in an emailed statement. A family member confirmed the death.

China and envoys of the Dalai Lama last held talks in Beijing in July, after being delayed by three weeks in the wake of China's deadliest earthquake in three decades.

Seven rounds of talks since 2002 have 'produced only a tightening of controls within Tibet even before the traumatic events of this year', Barnett said, referring to March rioting.

"It is possible that his death will remind the two parties that little time remains if they wish to resolve the issue by having the Dalai Lama put his name to an agreement," he said.

The Dalai Lama, revered by Tibetan Buddhists as their spiritual leader but loathed by China as a troublemaking separatist, smiled and waved to supporters as he left a hospital in India on Monday after being treated for four days for a stomach ailment.

The next round of talks could be held as early as October, two Chinese sources with knowledge of the slow-moving dialogue said.

Taktser Rinpoche, whose given name was Thupten Jigme Norbu, was recognised at the age of three as the reincarnated abbot of Kumbum monastery -- one of the most important in Tibetan Buddhism -- in Qinghai province.

He left Tibet after the Chinese takeover in 1950, worked as a translator for the CIA in Saipan in 1957 and helped train the first Tibetan resistance fighters who were parachuted into Tibet to fight a guerrilla war against the People's Liberation Army.

"Taktser Rinpoche was deeply mistrustful of the Chinese Communist Party's intentions in Tibet," the International Campaign for Tibet said.

He called for the complete independence of Tibet as opposed to the 'middle way' model of autonomy advocated by the Dalai Lama, who fled into exile in India in 1959 after an abortive uprising against Chinese rule.

Taktser Rinpoche served as the representative of the Dalai Lama in the United States and later in Japan.

He wrote several academic papers and books on Tibet including his autobiography Tibet Is My Country, one of the first books on the Tibetan experience to have scholarly credibility, International Campaign for Tibet said.

He went on to serve as a professor of Tibetan studies at Indiana University in the United States, where in 1979 he founded the Tibetan Cultural Centre.

After his retirement, he led a pro-independence group based in Indiana and took part in numerous walks across the United States to raise attention for the pro-independence movement.