A deal allowing a Chinese activist to remain in his country has fallen apart, creating a diplomatic nightmare for President Obama. 

Chen Guangcheng, the blind dissident who had sought refuge in the U.S. embassy in Beijing, wants to leave China with his family, the State Department confirmed early Thursday. 

But under a deal reached with Chinese authorities, Chen was to remain in a university town in China and get regular check-ins with U.S. diplomats. 

Chen now says he only left the embassy because he felt his life was in danger and that he still wants to leave China. 

"They as a family have had a change of heart about whether they want to stay in China," State Department spokeswoman Victoria Nuland told reporters Thursday, according to The Associated Press.

Chen's change of heart will further complicate a difficult diplomatic situation for the White House. 

President Obama has sought to project strength on human rights, especially with the November election looming, but Chinese officials are reportedly angry with the decision to harbor Chen. Beijing has demanded an apology from the president, and it is unclear whether American officials will further anger their Chinese counterparts by offering Chen and his family a chance to flee the country.

The fight over Chen is taking pace as Secretary of State Hillary ClintonHillary Diane Rodham ClintonDem targeted by party establishment loses Texas primary Penn to Hewitt: Mueller probe born out of ‘hysteria’ Trump claims a 'spy' on his campaign tried to help 'Crooked Hillary' win MORE and Treasury Secretary Timothy Geithner visit Beijing for strategic and economic talks. 

Chen ignited a political and diplomatic firestorm last week when he sought refuge in the American embassy in Beijing after escaping house arrest. The blind dissident, an outspoken critic of China's one-child policy, had originally agreed to leave the embassy to get treatment for an injury and be reunited with his family.

U.S. Ambassador Gary Locke continued to insist that Chen "unequivocally" was never pressured to leave the American embassy, but the activist said he continued to fear for his family's safety.

"We asked him was he ready to leave. He jumped up very excited and said 'let's go' in front of many, many witnesses," Locke said.