Bo Xilai, Chongqing party secretary attends the closing session of the Chinese People's Political Consultative Conference held in Beijing's Great Hall of the People, China on March 13, 2012. (Ng Han Guan/AP)

Bo Xilai, the charismatic Communist Party chieftain who built a popular following and seemed destined for one of China’s top leadership jobs, was unceremoniously stripped Tuesday of his remaining party posts, and his wife was arrested on suspicion of homicide. The widening scandal involves business quarrels, a flight to an American diplomatic outpost and the alleged murder of an expatriate British businessman.

In the secretive world of Chinese elite politics, Bo’s downfall in the space of just two months has been nothing short of spectacular. As of Tuesday night, Bo — the scion of one of China’s revolutionary veterans — was the subject of an investigation for “serious discipline violations,” according to a terse official dispatch.

China is preparing for a ­once-in-a-decade transition this fall to a new president, a new prime minister and new occupants in seven of the nine seats on the all-powerful Politburo Standing Committee. But the saga surrounding Bo, a local party chief, has upended the carefully stage-managed transfer of power and led to reports of rifts in the leadership ranks.

Even before this scandal erupted, Bo was seen by many as a disruptive force in a party that prizes public unanimity and faceless conformity. His “red revival” campaign — including mass singing of revolutionary anthems — stirred fears of a throwback to the Cultural Revolution, and his highly public crackdown on crime was considered particularly brutal. He unabashedly held up his province-size city as a new “model” for socialist development, with its emphasis on social welfare — a direct challenge to the “reform” elements of the party, led by outgoing Prime Minister Wen Jiabao, which advocate more Western-style economic liberalization.

Wen directly challenged Bo in a news conference last month, saying the economic opening needed to continue or China risked returning to the turmoil of the 1960s and early ’70s.

For weeks, disparate threads of Bo’s murky case had unfolded mainly through Internet rumors and overseas media reports. But two articles appearing after 11 p.m. Tuesday on Xinhua, China’s state news agency, finally began to unravel some of the mystery, offering the only official version so far of what happened in the southwestern city of Chongqing, where Bo until recently served as party boss.

Bo’s public troubles began Feb. 6, when his former police chief and onetime right-hand man, Wang Lijun, entered the U.S. Consulate in Chengdu and, according to Xinhua, made allegations about the death of the Briton, Neil Heywood. Heywood’s body was found in a Chongqing hotel room Nov. 15, and police initially said he died of heavy drinking, but the body was cremated before an autopsy could be performed. Wang told American diplomats that the Briton was murdered, Xinhua said.

After a day inside the consulate, Wang left and was taken by public security officials to Beijing, where he was placed under investigation. But based on his allegations, police reopened the case of Heywood’s death and found that the Briton had been involved in business dealings with Bo’s wife, Bo Gu Kailai, and was close to Bo’s son, Bo Guagua.

The investigation found that Bo’s wife and son “were in good terms with Heywood,” Xinhua said. “However, they had conflict over economic interests, which had been intensified.”

“After re-investigation there is now available evidence proving that Heywood died of homicide,” according to the reopened police probe, which said Gu and Zhang Xiaojun, identified as an “orderly” at the Bo household, were “highly suspected of committing the crime.” Gu and Zhang were arrested “on the suspected crime of intentional homicide,” the dispatch said.

Since Bo was removed as the Chongqing party chief last month, speculation has swirled about his whereabouts — he is thought to be held under guard in Beijing. The Xinhua article Tuesday reporting Bo’s removal from the 25-member Politburo and the Central Committee made no mention of any specific allegations against him, but Cheng Li, an expert on Chinese politics with the Brookings Institution in Washington, called it “highly likely” that he will face criminal charges

Purge with a difference

Other Politburo members have been purged in the two decades since the crackdown on pro-democracy students at Tiananmen Square. But those recent cases have involved corruption or other economic crimes. And earlier purges during China’s tumultuous history, such as the arrest and trial in 1981 of the Gang of Four after the Cultural Revolution, involved accusations of mass persecutions, but those were political crimes.

The allegations against Bo’s wife mark the first time the downfall of a senior leader has been linked to a premeditated homicide, said Jin Zhong, a longtime China watcher in Hong Kong and editor of Open magazine. “This surpassed anything I could have imagined,” he said. “This is not just a political case but involves a very serious, naked crime.”

But what most distinguishes Bo’s case from other recent top-level purges is his notoriety. He is a “princeling” — the son of one of Mao Zedong’s revolutionary allies, Bo Yibo. (His wife, an accomplished lawyer, is also a princeling — her father was Gu Jingsheng, an early revolutionary who served as party chief in Xinjiang.)

From his base in Chongqing, Bo had built a following among China’s “new leftists.” For that reason, senior leaders may have decided to move carefully, and step by step.

An official commentary for Wednesday’s People’s Daily started laying out the rationale for the purge. “The case of Neil Heywood is a serious criminal case which involved the family members and working staff of a leader of the Party and the country,” the commentary said. “The behavior of Bo Xilai violated the discipline of the Party severely, brought loss to the cause of the Party and the country, and vastly damaged the image of the Party and the country.”

“The Party doesn’t allow any special Party member to exist above the law,” the commentary said.

A country transfixed

On CCTV-13, the news channel of state-run China Central Television, a usually smiling female announcer sternly read the official statement on suspicions that Bo’s wife had committed murder. Videos of the broadcast, which aired shortly after 11 p.m. Tuesday, quickly popped up on the Internet and went viral, a sign of how the case has transfixed the country. By Wednesday morning, the video had been watched by nearly 5 million people on one Web site, and 3 million on another.

Some speculate that the party decided to go public with the investigation into Bo’s wife in an effort to undercut his popular support, and reduce the risk of any backlash and a possibly serious rift at the apex of the party.

But others said the episode showed that the party was actually unified, that Bo’s transgressions — and those, allegedly, of his wife — were so grievous that top party officials were eager to remove him swiftly and keep the leadership transition on track.

“I think this is an indication that the party’s top leadership is united,” said Cheng Li, the Brookings expert. “They are determined to put the Bo Xilai case behind them.”

Correspondent Andrew Higgins in Hong Kong and researchers Zhang Jie in Beijing and Wang Juan in Shanghai contributed to this report.