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By Chris Buckley and Benjamin Kang Lim

BEIJING, April 10 (Reuters) – China’s Communist Party has

banished the country’s brashest and most controversial

politician from its top ranks and detained his wife in

connection with the murder of a British businessman, the most

tumultuous upheaval in the nation’s leadership in decades.

The decision to cast out Bo Xilai from the party’s Central

Committee and its Politburo effectively ends the career of the

former high-flyer, widely seen as pressing for a top post in

China’s next leadership to be decided 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.

It was the most dramatic convulsion in China’s secretive

leadership since 1989, when Jiang Zemin was plucked from

obscurity to head the Communist Party after the bloody crackdown

on democracy protests in Beijing.

Jiang replaced Zhao Ziyang, who was toppled by hardliners

for supporting the student movement centered on Tiananmen Square

that was crushed by the army with heavy loss of life.

Xinhua said evidence indicated Heywood’s death was a

homicide and Gu Kailai and Zhang Xiaojun, an assistant in Bo’s

household, were “highly suspected.” It 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”, it 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.

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, Brian Rhoads and Raju Gopalakrishnan)