Bo Xilai, a high-profile contender for the top leadership of China, has been removed from his post as the Communist Party leader of a major southwestern city, potentially ending the rise of a prominent conservative voice in the country.

Vice Premier Zhang Dejiang will replace Bo as the party chief in Chongqing and will also keep his vice premier portfolio, state news agency Xinhua said in a brief report on Thursday.

Initial reports did not say if Bo would retain his seat in the party's 25-member Politburo.

Bo was criticised by Wen Jiabao, the prime minister, in a press conference on Wednesday over a February 6 incident in which Chongqing's police chief, Wang Lijun, briefly sought refuge in a US consulate. Chinese media speculated that Wang, who also held the position of vice mayor, had evidence of corruption and was seeking political asylum.

Wang was placed under investigation after being persuaded to leave the consulate.

Bo, 62, is considered a conservative and has tried to push the boundaries of populism in China, where many leading politicians are cautious pragmatists who climbed the ranks of the party bureaucracy. He is now reportedly held in Beijing while being investigated for unspecified reasons.

"One thing that we have to undertsand in Chinese politics is that there is a strong belief in collective ladership, so behind closed doors they may try to reach some sort of compromise and move forward from there," said Al Jazeera's Melissa Chan, reporting from Beijing. "This whole process is very opaque."

Before the recent scandal, Bo had been tipped to break into the Politburo's all-powerful, nine-member Standing Committee after the party congress in November.

Chan said Bo's sacking would probably prompt jostling as new contenders considered trying to get a seat on the committee. It comes before a major leadership transition in China's ruling party later this year following weeks of intense speculation about his future.

As the Chongqing party secretary since 2007, Bo oversaw a much-praised but controversial campaign against organised crime and official corruption.

He is known as a "princeling" son of Bo Yibo, one of the party's "eight immortals" from the late 1970s.