Neil Heywood death is a mystery, says Bo Xilai

The disgraced Chinese politician Bo Xilai has told government investigators he has no knowledge of the circumstances surrounding the death of British businessman Neil Heywood.

A well-placed source in Chongqing, who has spoken to senior government officials with knowledge of the investigation's progress, said: "Bo is denying everything, [saying] that he knows nothing."

Bo, Chongqing's former party secretary and a man once tipped for a place on China's Politburo standing committee, was stripped of power in March during the fallout from Heywood's alleged murder last November.

Both he and his wife, the lawyer Gu Kailai, have since vanished from the public eye. The state-controlled media has said Gu is "highly suspected" of involvement in Heywood's death while Bo is under investigation for "serious disciplinary violations".

Among the charges levelled at Bo is that he deliberately obstructed an investigation into Heywood's death by Wang Lijun, his then police chief.

Wang precipitated the current crisis in February when he sought refuge in the American Consulate in Chengdu but was subsequently forced to hand himself over to Chinese security officials.

Last week Japan's Asahi Shimbun newspaper reported that Gu had confessed to involvement in Heywood's murder, supposedly after he threatened to expose her for illegally transferring some £3.8 billion out of the country.

The source said: "The likelihood of a death sentence is low but she might get one as it involves a foreigner."

With the 18th national party congress fast approaching, Beijing is keen to draw a line under the Heywood scandal, which has been described as the worst political crisis China has faced in decades.

Government sources in Chongqing say Wang Lijun is likely to be tried next month in Chengdu, the capital of Sichuan province. Gu and Bo are also expected to be tried before the autumn congress. But the source said the central government had yet to decide how to deal with Bo, who still enjoys significant support within the party.