China's Communist Party has suspended a high-profile politician from its top ranks and named his wife as a suspect in a murder investigation over the death of a British businessman, the official Xinhua news agency has said.

Tuesday's decision to expel Bo Xilai, the former party chief in the city of Chongqing, from both the politburo and the central committee and to name his wife, Gu Kailai, as a murder suspect is likely to rattle leadership succession plans.

"Comrade Bo Xilai is suspected of being involved in serious disciplinary violations," said the news agency, citing the decision by the central party leadership.

"Police set up a team to re-investigate the case of the British national Neil Heywood who was found dead in Chongqing," Xinhua said in a separate report.

Bo was suspended in March from his role in Chongqing, the largest municipality in the People's Republic, as a scandal surrounding him unfolded.

The move to expel Bo from the central committee effectively ends the career of one of China's most controversial politicians.

Al Jazeera's Melissa Chan, reporting from Hong Kong, said many in China believed the investigation into Heywood's death was based on "very little forensic evidence" and was probably politically motivated.

Our correspondent said Bo's suspension from "the two groups that essentially run the country" had raised concerns of a possible "purge" within party ranks.

Dramatic turns

China's state-run Xinhua news agency said that existing evidence indicated Heywood died of homicide, of which Gu and Zhang Xiaojun, an assistant in Bo's household, were "highly suspected".

It referred to a dispute over unspecified "economic interests" between Gu and Heywood.

However, our correspondent says that because Heywood's body was "very quickly cremated" a full autopsy could not be performed.

The central committee is a council of about 200 full members who meet about once a year and the politburo is a more powerful body of about two dozen central committee members.

The announcements are the latest dramatic turns in the scandal over Bo and his family that emerged after his vice mayor, Wang Lijun, fled into a US consulate for 24 hours in February.

The decision does not mean Bo has been expelled from the Communist Party. But that risk, and the possibility of criminal charges, remain if the investigation gathers momentum.

Government offices did not immediately comment on the reported decision about Bo.

Some China watchers have seen Bo's fall from power in Chonqing as part of a power struggle as the party's senior leadership gears up for a transition of power later in the year.

Bo had been considered a possible contender to lead the party and his removal prompted internet rumours of political infighting, leading to a clampdown by Chinese authorities on social media and internet sites.