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Some methods developed in reversible data hiding (RDH) make use of prediction for data embedding for original pixel estimation. Predicators may also be exploited in RDH in encrypted image (RDHEI); this has become a research interest in recent years because of the development of cloud computing and a need for content owner privacy. This paper presents a high-capacity reversible data hiding in encrypted image (RDHEI) that employs local difference predictor. In this algorithm, an image is divided into non-overlapping blocks. In each block, the central pixel of the block is considered as the leader pixel and others as follower ones. The prediction errors between the intensity of the follower pixels and leader one are calculated using local difference predictor and analyzed to determine a label for block embedding capacity. This label indicates the amount of data that can be embedded in a block after encryption. Using this pre-processing for all blocks, we vacate rooms before the encryption of the original image to achieve high embedding capacity. Also, using these labels, embedded data is extracted and the original image is losslessly reconstructed at the decoding phase. Comparing to existent RDHEI algorithms, not only embedding capacity is increased by the proposed algorithm, but also a perfect reconstruction of the original image is realized by content owner without having data hider key. Experimental results confirm that the proposed algorithm outperforms state of the art RDHEI methods. [ABSTRACT FROM AUTHOR]