By Benjamin Lim and Sui-Lee Wee
BEIJING (Reuters) - Chinese state media denied rumors on Thursday that former president Jiang Zemin had died after a Hong Kong television station said he had, sparking a wave of speculation about a leadership transition due next year.
"Recent reports of some overseas media organizations about Jiang Zemin's death from illness are pure rumor," the official Xinhua news agency quoted "authoritative sources" as saying.
Jiang, 84, is in poor health. Three sources with ties to China's leadership told Reuters that he is in intensive care in Beijing at the No. 301 military hospital after suffering a heart attack.
In the opaque world of Chinese politics, the health of a leader is fodder for rumors about how the balance of power is shifting at the highest levels of the government.
Current President Hu Jintao retires from office from late next year in a sweeping leadership overhaul, and the rumors about Jiang's health underscore the uncertainties around this.
Hong Kong's Asia Television interrupted its main newscast on Wednesday evening to announce solemnly that Jiang had died, and followed with a brief profile. It kept up the news for several hours on a ticker and then said it would air a special report on Jiang's life late in the evening.
It later canceled the report, and withdrew the ticker after failing to get official confirmation.
Meanwhile, the Shandong News website (www.sdnews.com.cn) in northeast China posted a black banner with white characters, saying "Our Respectable Comrade Jiang Zemin Is Immortal." The site was no longer accessible on Thursday.
China's foreign ministry spokesman Hong Lei deflected numerous questions about Jiang at a regular news briefing, saying Xinhua had already made a full explanation and that he had nothing further to add.
Searches on a popular Chinese micro-blogging site with terms ranging from "Jiang Zemin" to the Yangtze River (Jiang's surname means "river"), are blocked, a sign that China's censors are concerned about public debate about his health.
Premature reports about the demise of Chinese leaders are hardly new. In the 1990s, Hong Kong and Japanese media reported several times that paramount leader Deng Xiaoping had died.
UNCERTAINTY FOR JIANG ALLIES
Jiang Zemin's passing -- on the surface at least -- would likely have limited impact on the direction of China's politics and economic development.
He retired long ago, handing over the Communist Party's top job to Hu in 2002 and his other posts over the next two years. Hu and Premier Wen Jiabao have since led the country on a decade-long charge that saw it grow from an economy the size of Britain to one that has surpassed Japan.
But the prospect of Jiang's passing would add a breeze of uncertainty to a transition that is widely thought to hand power from Hu to a new generation led by Xi Jinping, currently vice president. That would take place at the 18th Communist Party Congress expected sometime in the autumn of 2012.
Xi, anointed as Hu's heir apparent at the congress in 2007, was considered acceptable to both the Hu and Jiang camps.
But in China, the death of a senior leader can be cause for worry, and even spell disaster, for proteges and allies who are no longer protected.
Hu would no longer have Jiang acting as a counterweight to his influence over the future make up of the next leadership.
"New leaders are selected by old leaders," Zheng Yongnian, professor of Chinese politics at the National University of Singapore. "He's one of the important selectorate. After he passes away, other current leaders will become more influential."
He could also settle scores or take down other rivals with links to Jiang, if necessary.
Past leaders can have considerable clout in China. Deng wielded power as paramount leader despite having given up all his posts except the honorary chairman of the Chinese bridge association.
Jiang consolidated his own grip on power after Deng died in 1997. By the time Jiang retired his last post -- as head of the military commission -- in 2004, he had already stacked the Politburo with his people.
"Front and back, left and right, up and down. No matter where Hu looks, there is a Jiang man," said one source at the time the leadership line-up was announced back in 2002.
In Jiang's case, there are quite a few allies still in place in the leadership who might now have cause for concern, should Hu assert himself.
"If he dies, the situation becomes very delicate," said one source with ties to leadership circles who requested anonymity given the sensitivity of the subject.
Among the Jiang allies still in senior posts are: Wu Bangguo, parliament chief and the second ranking person in the nine-member Politburo Standing Committee; Jia Qinglin, who heads a parliamentary advisory body and is ranked fourth; and Li Changchun, who oversees propaganda and ideology and is ranked fifth.
How exactly it will play it out, is unclear. With the Party Congress only about 15 months away, Hu's window to further consolidate his grip on power is considerably shorter than Jiang had as he prepared to step down.
(Writing by Brian Rhoads; Additional reporting by Alison Leung in HONG KONG and Ben Blanchard in BEIJING,; Editing by Don Durfee and John Chalmers)