Xinhua said police will reinvestigate the case of Neil Heywood, found dead in Chongqing last November.
Heywood, who was friends with Bo, died because of over-consumption of alcohol according to his death certificate, although he was reportedly cremated without an autopsy. While his family and the British embassy initially accepted the police findings, new doubts have been raised, the BBC reported.
Gu has been "transferred to judicial authorities on suspected crime of intentional homicide," the Xinhua report said. Also suspected in the murder is Bo's aide, Zhang Xiaojun.
Xinhua said that Gu had fallen out with Heywood "over economic interests, which had been intensified."
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Xinhua also announced Tuesday that Bo, the former Chongqing party boss, has been suspended from the Central Committee and Politburo, the 25-member body that runs China. He is suspected of "serious discipline violations," the report said.
Bo, who was sacked last month from his regional Chongqing role and put under house arrest, will now be formally investigated, sources told The New York Times.
"The decision to banish Bo... effectively ends the career of China's brashest and most controversial politician, whose downfall has kindled ideological tension and sparked opposition from leftist sympathizers who insist he is the victim of a plot," Reuters reported.
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Bo's shock dismissal follows a scandal last month in which Bo’s former chief of police Wang Lijun spent a day at a United States consulate.
The New York Times said China's Communist Party leaders are moving quickly to curb political damage from the scandal, ahead of a once-a-decade leadership change at the 18th Party Congress later this year.
Bo had been widely expected to be promoted to China’s most powerful body, the Politburo Standing Committee.
He was replaced in Chongqing by Zhang Dejiang, a North Korean-trained economist and Vice-Premier.
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