(Reuters) - The British businessman whose murder has sparked political upheaval in China was poisoned after he threatened to expose a plan by a Chinese leader's wife to move money abroad, two sources with knowledge of the police investigation said.

It was the first time a specific motive has been revealed for Neil Heywood's murder last November, a death which ended Chinese leader Bo Xilai's hopes of emerging as a top central leader and threw off balance the Communist Party's looming leadership succession.

Bo's wife, Gu Kailai, asked Heywood late last year to move a large sum of money abroad, and she became outraged when he demanded a larger cut of the money than she had expected due to the size of the transaction, the sources said.

She accused him of being greedy and hatched a plan to kill him after he said he could expose her dealings, one of the sources said, summarizing the police case. Both sources have spoken to investigators in Chongqing, the southwestern Chinese city where Heywood was killed and where Bo had cast himself as a crime-fighting Communist Party leader.

Gu is in police custody on suspicion of committing or arranging Heywood's murder, though no details of the motive or the crime itself have been publicly released, other than a general comment from Chinese state media that he was killed after a financial dispute.

The sources have close ties to Chinese police and said they were given details of the investigation.

They said Heywood - formerly a close friend of Gu and who had been helping her with her overseas financial dealings - was killed after he threatened to expose what she was doing.

"Heywood told her that if she thought he was being too greedy, then he didn't need to become involved and wouldn't take a penny of the money, but he also said he could also expose it," the first source said.

The sources said police suspect the 41-year-old was poisoned by a drink. They did not know precisely where he died in Chongqing. But they and other sources with access to official information say they believe Heywood was killed at a secluded hilltop retreat, the Nanshan Lijing Holiday Hotel, which is also marketed as the Lucky Holiday Hotel.

The sources said Gu and Heywood, who had lived in China since the early 1990s, shared a long and close personal relationship, but were not romantically involved.

The sources did not know details of the offshore transactions that Heywood facilitated for Gu, but said exposure of the deals would have imperiled her and her ambitious husband, who was campaigning for promotion to the top ranks of China's leadership. Bo has since been ousted over the scandal.

"After Gu Kailai found that Heywood wouldn't agree to go along and was even resisting with threats - that he could expose this money with unknown provenance - then that was a major risk to Gu Kailai and Bo Xilai," said the first source, requesting anonymity due to the sensitivity of the case.

It was not possible to get official confirmation of the case police are building against Gu. The Chinese government did not respond to faxed questions about the case. Some of Bo's leftist supporters have said the case could be a campaign to discredit him.

Gu, who is in custody and facing a possible death sentence for murder, and Bo could not be reached for comment. Bo has not been seen since appearing at parliament in March, when he held a news conference decrying the "filth" being poured on his family.

Efforts to contact Heywood's mother and sister at their homes in London were unsuccessful. The door to the mother's home carried a note saying she would not speak to reporters.

HEYWOOD WAS GU'S 'SOULMATE'

Heywood had spent his last week in Chongqing in Nan'an district, an area politically loyal to Bo, and stayed at two hotels: the Nanshan Lijing Holiday Hotel and the Sheraton hotel.

Staff at each hotel said they knew nothing of a British man dying there. A guard was barring access to an apparently empty row of villas within the grounds of the Nanshan Lijing Holiday Hotel on Sunday and Monday, saying a meeting was going on.

Heywood's falling-out with Gu followed a period in which she had grown distant from her ambitious, perpetually busy husband and she had turned to Heywood as a soulmate, sources said.

"Bo and Gu Kailai had not been a proper husband and wife for years ... Gu Kailai and Heywood had a deep personal relationship and she took the break between them deeply to heart," said Wang Kang, a well-connected Chongqing businessman who has learned some details of the case from Chinese officials.

"Her mentality was 'you betrayed me, and so I'll get my revenge'," Wang said in his office, decorated with pictures of himself meeting senior officials, including Bo's late father, the revolutionary veteran Bo Yibo, a comrade of Mao Zedong.

Heywood got to know the powerful family when Bo Xilai was mayor of Dalian in the 1990s. Heywood helped with getting the couple's son, Bo Guagua, into an exclusive British school, Harrow, said one of the sources with police contacts.

The scandal over Heywood's death broke in February when Bo's former police chief, Wang Lijun, fled to a U.S. consulate after he had confronted Bo with allegations of Gu's involvement. He spent about 24 hours inside the consulate before he left into the hands of Chinese central government authorities.

Bo was stripped of all his party positions last week, ending his bid to join the upper echelons of the Chinese leadership at a Party Congress late this year, and opening the door to jockeying among rivals to get a place in the new lineup.

It was not immediately clear how Heywood would have helped Gu shift large sums of money offshore, though China's capital controls pose a formidable barrier to anyone trying to move large sums of yuan out of the country.

Chinese leaders' salaries are not extravagant and there have been questions about how Bo managed to fund the expensive Western schooling and lifestyle for his son, Bo Guagua, who also studied at Oxford university and is enrolled at Harvard. Bo said in March the schools were funded by scholarships.

The sources said there had been no sign of any dispute between Gu and Heywood until October and November when the argument over funds began. The lack of a paper trail made it difficult for police to determine how much money was involved, they added.

Police suspect Heywood took a poisoned drink, according to one of the sources, and died on November 15. Both sources said Gu was not present at the scene.

The sources said Heywood had stayed at the Nanshan Lijing Holiday Hotel, a secluded complex of rooms and villas in green hills overlooking Chongqing that Gu Kailai had visited in the past. Staff there said they had no knowledge of the death of a British man at the hotel in November.

(Additional reporting by William Maclean in LONDON and Benjamin Kang Lim in BEIJING; Editing by Brian Rhoads, Mark Bendeich and Dean Yates)

http://www.reuters.com/article/2012/04/16/us-china-leader-murder-idUSBRE83F09620120416

Well that is the dumbest blackmail plot since "The Mask of Dimitrios". 
BTW China has really opened up if Wang Kang is going to get hot tips from police and then go blab to Reuters without getting shipped to Xinjiang to recover the peasant virtues.