By Ben Blanchard and Chris Buckley
BEIJING (Reuters) - The Communist Party boss of China's southwestern city of Chongqing, Bo Xilai, has been removed, state news agency Xinhua said on Thursday, following a scandal involving a senior aide who took refuge in a U.S. diplomatic mission last month.
Vice Premier Zhang Dejiang will replace Bo, Xinhua said in a brief report, and will also keep his vice premier portfolio.
Xinhua did not mention whether Bo had lost his seat in the Politburo Standing Committee, the government's highest level body.
Bo, who has been a high-profile contender for top leadership, has been the subject of much speculation since Vice Mayor Wang Lijun, his longtime police chief, went to ground in the U.S. Consulate in nearby Chengdu until he was coaxed out and placed under investigation.
The incident and the rumors it fanned have blotted Bo's prospects of climbing to the Party's top ruling body when a new generation of leaders is unveiled at a meeting late this year.
The 18th Party Congress will see China's biggest leadership transition in nearly a decade.
Bo's abrupt removal implied that while he may be kept on in some position until the party succession later this year, his chances of promotion were finished, said Chen Ziming, an independent scholar in Beijing who follows party politics.
"Now it looks like Wen Jiabao's comments yesterday represented the leadership's collective view that Bo needed to go," said Chen. "This will affect the leadership politics for the 18th Congress, because this opens up new uncertainties about who is in contention."
Premier Wen added to the cloud around Bo at a news conference on Wednesday by scolding the Chongqing government about the scandal, in the first public comment by a member of the Politburo.
Calls to two Chongqing city government officials for comment were not returned.
The interest in Bo on the sidelines of a parliament session, including a rare grilling by foreign media at a news conference last week, underscored how much he has stirred up the typically stolid Chinese political scene ahead of that succession.
Chongqing authorities said last month that Wang had taken sick leave, sparking speculation he had been purged and had sought asylum at the U.S. Consulate in Chengdu.
Wang had been a key figure in a drive against organized crime that was pursued by Bo, who has also encouraged a revival of socialist culture from the time of Mao Zedong while seeking to transform Chongqing's economy into a model of more equal growth.
(Reporting by Ben Blanchard and Chris Buckley; Editing by Don Durfee and Ken Wills)