POWERFUL party elder Peng Zhen has made a comeback to the media limelight, complicating the scenario for the post-Deng Xiaoping succession. Mr Peng, 92, a former chairman of the National People's Congress, has made what his friends in Beijing call a 'near-miraculous recovery' from cancer and made frequent appearances in the capital. Since the veteran, who used to be in charge of the legal and security apparatus, is considered a conservative, his 'reappearance' is thought to bode ill for Mr Deng's plan to pass the baton to a reformist leadership. Political sources said Mr Peng might ally himself with such other conservative elders as Chen Yun and Song Ping in picking the new generation of cadres. Recently, however, there have been indications that Mr Peng, also a former Beijing mayor, might have sent signals that he was willing to make a compromise with the Deng camp. The Chinese press reported yesterday that Mr Peng had last month visited the Capital Iron and Steel Works (Shougang), whose management had benefited from the patronage of the Deng family. The reports quoted Mr Peng as telling the head of the corporation, Zhou Guanwu, that he saluted him as well as other staff. 'You have done a good job,' Mr Peng said. 'Shougang has made contribution to the party, the country and the people.' Sources close to the major state plant said it was significant that Mr Deng had visited Shougang in May 1992, when the chief architect of reform announced many preferential policies for the company. They included the freedom to set up a bank and to open branches in Hong Kong and abroad. Senior executives of Shougang, including Mr Zhou, are known to be 'family friends' of the entire Deng household. By coincidence, Mr Zhou was chosen one of the 'Ten Men of Reform' in the first such competition held in China. Analysts said Mr Peng's visit to Shougang could be a sign that in return for political favours to his family and his proteges, he would be willing to throw his support behind Mr Deng's reforms. Meanwhile, the Chinese media has continued to build the reputation of Mr Deng. The latest book on the patriarch, Deng Xiaoping in Jiangxi, was published yesterday in Nanchang where Mr Deng launched a number of insurrections in the 1930s. The book eulogised Mr Deng's efforts then in fighting against 'leftism' and impractical concepts of Marxism. Beijing has been full of speculations that Mr Deng had last month left the capital for a tour of Shanghai, Nanjing and Wuhan. While these reports cannot be confirmed, sources close to the Deng family said they expected his health to hold up at least until next year.