BEIJING (Reuters) - China's Communist Party has suspended former high-flying politician Bo Xilai from its top ranks and named his wife a suspect in the murder of a British businessman, a dramatic turn in a scandal shaking leadership succession plans.
The decision to banish Bo from the Central Committee and its Politburo effectively ends the career of China's brashest and most controversial politician, widely seen as pressing for a top post in China's next leadership to be settled later this year.
The official Xinhua news agency confirmed a Reuters report several hours earlier on Tuesday that Bo had been suspended from his party posts, and separately reported that his wife, Gu Kailai, was suspected in the murder of Briton Neil Heywood.
"Comrade Bo Xilai is suspected of being involved in serious disciplinary violations," said Xinhua, citing a decision by the central party leadership to banish Bo from its top ranks.
"Police set up a team to reinvestigate the case of the British national Neil Heywood who was found dead in Chongqing," the news agency said, referring to the sprawling southwestern municipality where Bo was party chief until he was dismissed in March as a scandal surrounding him unfolded.
Evidence indicated Heywood's death was a homicide and Gu Kailai and Zhang Xiaojun, an assistant in Bo's household, were "highly suspected," said the news agency, which cited a dispute over unspecified "economic interests" between Gu and Heywood that "constantly intensified".
Gu and Zhang had been "handed over to the judicial authorities", Xinhua said - meaning they have been detained.
The Central Committee is a council of about 200 full members that meets about once a year and the Politburo is a more powerful body of about two dozen Central Committee members.
The announcements are the latest twist in a furore over Bo and his family that erupted after his vice mayor, Wang Lijun, fled to a U.S. consulate for 24 hours in February, alleging that Gu was involved in Heywood's death.
For timeline of downfall, link.reuters.com/jes57s
The Communist Party is grappling with the volatile scandal months before it unveils a new line-up of leaders, a group Bo once yearned to join.
Bo's ouster has sparked public contention and revealed friction among China's leaders, pitting reformist Premier Wen Jiabao against conservative officials who sources have said were dismayed by the upheavals months before the party congress that anoints the new leadership.
There were even outlandish rumours of an attempted coup.
"(This) appears to represent the top leadership finally reaching an agreement that it must be seen to hang together in the run-up to the leadership succession, in order to put an end to the many wild speculations surrounding the Bo case," said Steve Tsang, a professor of Chinese studies at Nottingham University in Britain.
After the announcements, the People's Daily, the chief mouthpiece of the Communist Party, told officials and citizens to unite around President Hu Jintao. Hu retires at the end of the year, when Vice President Xi Jinping is almost certain to succeed him as China's top leader.
CHONGQING RESIDENTS "STAGGERED"
Sharply dressed in a party of stolid conformists, Bo arrived in Chongqing in 2007 and promoted the city as a bold egalitarian alternative to China's current pattern of growth. As the "princeling" son of a revolutionary leader, Bo had added claim to speak on behalf of the party's traditions.
But his promotion of Mao Zedong-inspired "red" culture and sweeping crackdown on organised crime prompted fears that he risked reviving some of the arbitrary lawlessness of the Cultural Revolution in the 1960s - a criticism that Premier Wen Jiabao laid before the public in mid-March.
"This is so dramatic, so extraordinary," said Li Zhuang, a Beijing lawyer who was once jailed in Chongqing for challenging Bo's campaign against organised crime.
"If, and I stress if, there are real proven links to Heywood's death, then we can imagine that Gu and Bo Xilai will find out that, as Chinese television has said about this, nobody is above the law."
Any criminal investigation of Bo would only begin after the party's disciplinary agency investigated him and decided whether to turn his case over to police and prosecutors, said Li.
"This means that Bo's political career is effectively over," Chen Ziming, an independent political scholar in Beijing, said before the announcement, citing rumours of Bo's suspension.
The decision to suspend Bo from the party's top bodies does not mean he has been expelled from the party.
Unlike past removals of defiant leaders over corruption charges, Bo's downfall has been tinged by ideological tension and triggered open opposition from leftist sympathisers who have insisted he is the victim of a plot.
Residents of Bo's former power base, Chongqing, were shocked on hearing the news, said Zhang Mingyu, a businessman in the city who has accused Bo of using his crackdown on organised crime to stifle critics and legitimate business.
"In Chongqing, everybody is up and discussing this and waiting for more news," Zhang told Reuters late in the evening. "The ordinary residents are staggered. Many didn't think the rumours could be true. They want to know what the hell has been going on."
UK GOVERNMENT WELCOMES INVESTIGATION
Wang's flight to the U.S. consulate and his allegations prompted the British government to urge an investigation into the death in November of the Briton, Heywood, who Wang said was close to Bo's family and had a dispute with Bo's wife, Gu.
British Foreign Secretary William Hague said he welcomed China's announcement of an investigation into Heywood's death.
Bo, 62, and his wife, formerly a powerful lawyer, have disappeared from public view since his removal as chief of Chongqing, and they have not responded publicly to the reports. Nor has Wang, who is under investigation.
The government said Heywood was once "on good terms" with Gu and Bo Guagua, the couple's son who went to the British private school Harrow, where Heywood also studied. Bo Guagua has been studying at Harvard University and he earlier won a reputation for partying at Oxford University.
Bo Xilai vowed to narrow the gap between rich and poor, kindling hopes among supporters that he could push the nation in a left-populist direction if he joined the central leadership.
At a news conference days before his dismissal as Chongqing party chief, Bo scorned as nonsense unspecified accusations of misdeeds by his wife and said unnamed people were pouring "filth on my family".
Bo's hopes for surviving the scandal were probably fatally wounded by his unabashed ambition, which irked many officials, said a source close to Bo and other leaders, speaking to Reuters before the announcements.
"His advantage was his confidence, but his disadvantage was that he was too confident," said the source, who spoke on condition of anonymity. "The signs are that he'll face trial."
(Additional reporting by Ben Blanchard and Don Durfee; Editing by Don Durfee and Robert Birsel)
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