Citing two unnamed people with leadership connections, the newspaper said Jiang's offer to relinquish authority as chairman of the Central Military Commission potentially gives Hu Jintao, who succeeded Jiang as president of China in 2002, a chance to become the country's undisputed top leader, commanding the state, the army and the ruling party.

But people here who were informed about a bargaining session under way at a government compound in western Beijing said it remained unclear whether Jiang genuinely intended to step aside, or if he would do so on terms acceptable to Hu, the report said.

One official said it was possible that Jiang, 78, has calculated that he will be called on to remain military chief or to hold another position of influence, The Times said.

However, Jiang's resignation, which he announced to a meeting of senior party officials late last week, is an indication that horse-trading is under way before a national party meeting due to take place later this month, the paper said.

If Hu were to gain control of the armed forces, he could potentially carry out an agenda that is more open to change at home and possibly less truculent in managing local hot spots like Hong Kong and Taiwan, The Times pointed out.

China's official news media have not reported on the meetings.

The paper cautioned that the two people, who described the proceedings on condition of anonymity, probably have only a partial understanding of what happened and have received their information from other individuals who have a vested interest in the outcome.

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