China's Xi Reached Deal With Former Leaders To Investigate Ex-Security Chief: Reuters

(Reuters) - Two influential former Chinese leaders gave their consent for President Xi Jinping to investigate ex-domestic security chief Zhou Yongkang, sources told Reuters, a sign the corruption probe will not open a rift in the ruling Communist Party.

Xi would not have been able to investigate someone as powerful as Zhou without the agreement of senior party members and other retired top officials, political analysts said.

But less clear is whether the elite is starting to get jittery over Xi's expanding corruption crackdown, which is spreading fear throughout the party and the government.

Xi's predecessors Hu Jintao and Jiang Zemin had approved the formal investigation into Zhou, the most senior Chinese official to be ensnared in a graft scandal since the party swept to power in 1949, two sources with ties to the leadership said.

The party said in a brief statement on Tuesday that Zhou was being investigated by the party's anti-corruption watchdog for suspected "serious disciplinary violations", the usual euphemism for graft although it could also imply other wrongdoing. The statement made no mention of any laws being broken.

Zhou, 71, was the security tsar within the Politburo Standing Committee - China's apex of power - for five years until he retired in 2012.

"Jiang Zemin, Hu Jintao and Xi Jinping reached a consensus to deal with Zhou Yongkang for violating party discipline," one of the sources said.

Former top leaders in China usually wield a lot of influence behind the scenes in a political system that prizes consensus decision-making. Both Jiang and Hu, as former presidents and heads of the party, also still have allies installed in office.

The party statement did not detail wrongdoing by Zhou, but the sources said he had been accused of corruption involving family members and political allies as well as accepting bribes to promote officials.

"Not all charges against Zhou would be made public," added the source, who requested anonymity to avoid repercussions for speaking to a foreign reporter without authorisation.

Zhou, who was last seen at an alumni celebration at the China University of Petroleum on Oct. 1, could not be reached for comment. It is not clear if he has a lawyer.

WHO'S NEXT?

The party statement on Zhou coincided with an announcement that its 205-member Central Committee would convene in October to "comprehensively study the advancing of the rule by law".

Another source with leadership ties said Xi was considering a proposal to let the Central Committee decide whether to press criminal charges against Zhou after anti-corruption investigators detailed their case, as opposed to having the matter dealt with internally by the party.

"This would be a first if Xi decides to let the Central Committee vote whether to put Zhou on trial," the source said.

By breaking an unwritten rule that members of the Standing Committee would not come under scrutiny after retirement, Xi could risk antagonising other party elders who fear that they and their families could be next if the crackdown does not ease off after Zhou's investigation, political analysts said.

Xi's campaign has already sown so much fear that many officials are doing anything to stay out of trouble - from dithering over approving major projects to seeking early retirement. Some top executives under investigation at state-owned enterprises have committed suicide.

About 30 senior officials at the provincial and ministerial level or above have been put under investigation for corruption since December 2012, state media has said.

The People's Daily newspaper, the party's mouthpiece, said the crackdown was not about to end.

"There will be no halt. Taking down Zhou Yongkang absolutely does not put an end to anti-corruption (efforts). This is only one step in a process. Going forward, whoever is corrupt will be punished," the newspaper said in a commentary.

Reuters reported in early December that Zhou had been placed under virtual house arrest after Xi ordered a special task force to look into corruption accusations against him.

Reuters also reported in March that Chinese authorities had seized assets worth at least 90 billion yuan (£8.59 billion) from family members and associates of Zhou. More than 300 of Zhou's relatives, political allies and staff had been taken into custody or questioned, said sources who had been briefed on the investigation.

Zhou's son Zhou Bin had also been arrested, the influential Chinese magazine Caixin reported on its website after news of the investigation into his father had been made public.

POWER STRUGGLE

But Zhou Yongkang's case is also about power.

Sources with ties to the Chinese leadership have said Xi wants to bring down Zhou for allegedly plotting appointments to retain influence ahead of the 18th party congress in November 2012, when Xi took over the party.

Zhou had nominated Bo Xilai, a charismatic politician with leadership ambitions, to succeed him as domestic security chief and had tried to orchestrate the younger man's promotion to the Standing Committee, the sources have said.

Bo later fell in a divisive scandal following accusations his wife murdered a British businessman in 2011. Bo's wife was convicted over the killing and Bo himself was jailed for corruption and abuse of power last year.

Xi has made fighting pervasive graft a major theme of his administration and has promised to go after "tigers" - or senior officials - as well as "flies", or those of lower rank, as part of his effort to try to restore the party's tarnished image.

It was unclear if Zhou would eventually be indicted.

Putting Zhou on trial might risk embarrassing revelations about the party's inner workings coming to light, said another source.

"It's probably too dangerous for the party," said the source.