The Communist Party has expelled Bo Xilai, the former high-flying Chongqing party boss, from its top ranks and launched a police investigation centred on his wife, Gu Kailai, in connection with the murder of Neil Heywood, a British citizen who worked closely with Gu and her son.
In a spectacular fall from grace that has rocked the nation's leadership succession, Bo has been stripped of his position as a member of the Central Committee and the Politburo.
It marks the end of a career for a polarising figure on the mainland, a princeling politician who battled corruption in Chongqing, espoused many of the ideals of Mao Zedong and was tipped to join the nine-member Politburo Standing Committee, the party's top decision-making body. Bo, 62, was being investigated by the party's anti-graft watchdog the Central Commission for Discipline Inspection, Xinhua said.
He is the highest-ranking official to be sacked since former Shanghai party chief Chen Liangyu in 2006 and former Beijing party boss Chen Xitong in 1995.
The official news agency also confirmed rumours linking his wife to the death of British businessman Heywood, who was a friend of Bo's family and died in Chongqing in November.
A probe by mainland police found Gu was 'strongly suspected' of killing Heywood along with Zhang Xiaojun, one of Bo's guards, due to 'conflict over economic interests'.
'[Gu Kailai] and their son were on good terms with Heywood. However, they had conflict over economic interests, which had intensified,' said Xinhua, citing police investigation results. Both Gu and Zhang were in the custody of the judicial authorities and were suspected of the crime of 'intentional homicide' after a review of Heywood's case, it added.
'Whoever has broken the law will be handled in accordance with the law and they will not be tolerated, no matter who is involved,' Xinhua said, citing an anonymous senior official.
But it did not say if Bo played a role in the case.
British Foreign Secretary William Hague welcomed the reopened investigation. 'We now look forward to seeing those investigations take place and hearing the outcome of those investigations,' Associated Press reported Hague as saying. 'I don't want to prejudice their conduct in any way.'
Britain has formally requested an inquiry into Heywood's death.
Xinhua also confirmed that police reopened the case after Bo's right-hand man, Wang Lijun - who was investigated after he sought asylum at the US consulate in Chengdu, Sichuan province, in early February - revealed 'mysterious circumstances' surrounding Heywood's death.
Bo was stripped of his Chongqing post last month to take the blame for Wang's defection attempt.
Analysts said although Beijing's verdict on Bo was long expected, the way he fell from grace was nothing short of political drama. They noted that key questions remain unanswered surrounding Bo's dismissal.
Rumours still abound of there being a high-level power struggle behind Bo's downfall ahead of the once-in-a-decade leadership transition later this year.
Sources said senior Chongqing officials above county level had been briefed about the latest development concerning Bo, a former Liaoning governor and commerce minister who was transferred to the southwestern municipality in 2007.
After he was toppled on March 15 some microbloggers wrote on Sina Weibo that Bo was put under shuanggui - disciplinary confinement for cadres being probed for graft. The entries were later deleted.