  A measurement of the analyzing power $A_y$ of the $\vec{p}d \to (pp) + n$
reaction was carried out at beam energies of 0.5 and 0.8 GeV by detection of a
fast forward proton pair of small excitation energy $E_{pp} < 3$ MeV. The
kinematically complete experiment made use of the ANKE spectrometer at the
internal beam of COSY and a deuterium cluster--jet target. For the first time
the $S$--wave dominance in the fast diproton is experimentally demonstrated in
this reaction. While at $T_p=0.8$ GeV the measured analyzing power $A_y$
vanishes, it reaches almost unity at $T_p=0.5$ GeV for neutrons scattered at
$\theta_n^{c.m.}=167^\circ$. The results are compared with a model taking into
account one--nucleon exchange, single scattering and $\Delta$ (1232) excitation
in the intermediate state. The model describes fairly well the unpolarized
cross section obtained earlier by us and the analyzing power at 0.8 GeV, it
fails to reproduce the angular dependence of $A_y$ at 0.5 GeV.
