Bo Xilai's wife 'admits' murdering Briton to cover up theft of £3.8bn

Gu Kailai confesses to killing Neil Heywood to stop businessman revealing her crimes

Gu Kailai, the wife of purged Communist Party leader Bo Xilai, has confessed to murdering the British businessman Neil Heywood to stop him revealing details of her financial misdeeds, a Japanese newspaper has reported.

The Chinese government has said that Ms Gu was "strongly suspected" of involvement in the death of Mr Heywood, who had business ties with her and Mr Bo, in Chongqing last November.

Mr Bo was stripped of his post as Communist Party secretary of Chongqing in south-west China in April, in China's biggest political scandal for decades. Neither he nor his wife have been seen in public since.

Citing Communist Party sources, the Asahi Shimbun newspaper said Ms Gu was being interrogated in a government facility in the north of China. She reportedly told investigators she killed Mr Heywood to stop him revealing illegal transfers abroad of $6bn (£3.85bn). The Briton had allegedly helped her to organise the transfers by opening accounts and exchanging currencies.

Mr Bo was purged after his protégé and former police chief, Wang Lijun, fled to the US consulate in Chengdu and revealed suspicions that Ms Gu and Zhang Xiaojun, an aide in their household, were behind Mr Heywood's death.

Initially the authorities in China said Mr Heywood had died from alcohol poisoning or a heart attack, but they now believe he may have been poisoned. The Communist Party's leadership set up a special team in February to reinvestigate the case.

According to the investigation report circulated among senior cadres, Ms Gu, 53, admitted to killing her former associate after feeling "driven into a corner" by the investigation into her financial dealings. She reportedly provided a specific explanation about how she killed Mr Heywood.

The authorities were also investigating whether Mr Bo, 62, was aware of his wife's deeds, the sources said. Hundreds of Mr Bo's associates – from household staff members to senior corporate executives – have been detained or questioned during the investigation.

The report was drawn up by a top Communist Party bureau under President Hu Jintao, who is also General Secretary of the party. After seeing the report, the leadership has decided to indict Ms Gu, the Asahi Shimbun said.

The government is keen to start Ms Gu's trial during the summer to have it out of the way before a once-in-a-decade leadership transition in the autumn, when President Hu Jintao and Premier Wen Jiabao are due to hand over the reins of power to Xi Jinping and Li Keqiang.

It is rare in China that anyone who is brought to trial is found innocent. It is likely Ms Gu will either be executed, or have her death sentence suspended for two years, which usually means it will not be carried out.

Meanwhile, Cambodia said it would not extradite a Frenchman it detained for suspected involvement in the death of Mr Heywood.

Architect Patrick Devillers was arrested on 13 June. The Foreign Minister Hor Namhong said Cambodian officials detained Mr Devillers at China's request but needed more evidence of wrongdoing before they would hand him over to another nation.