Disgraced Chinese leader Bo Xilai ran an extensive wire-tapping system that spied on top officials including the president and contributed to his downfall, the New York Times said Thursday.

The charismatic Bo had been widely expected to ascend to the all-powerful nine-man Communist Party committee that runs China later this year but was ousted recently in a scandal that has shaken Chinese politics to its core.

Bo is under investigation for "serious discipline violations" -- party code for corruption -- while his wife Gu Kailai has disappeared into custody and is being probed for involvement in the alleged murder of a British businessman.

But another key reason for Bo's downfall was his use of wire-tapping in the huge southwestern municipality of Chongqing, which he headed until his removal in March, the New York Times said.

The ambitious Bo tapped the phones of nearly all high-ranking leaders who visited Chongqing, keen to stay apprised of what they were saying about him as he angled for the top leadership, it said, quoting sources with party links.

On one occasion, anti-bugging devices used by central government authorities detected that a phone call to Chongqing by President Hu Jintao was being wiretapped, it said.

The discovery by secrecy-obsessed central government officials triggered an investigation that helped bring Bo down, it added.

The scandal burst into the open in February when Bo's right-hand man Wang Lijun fled in fear to a US consulate in China, reportedly demanding asylum and handing over dirt on his former boss.

He subsequently left the consulate and has disappeared into Chinese custody, but the incident triggered the rapid unravelling of Bo's fortunes and those of his high-flying family.

The latest Bo family casualty was his brother Bo Xiyong, who has resigned as vice chairman and executive director of China Everbright International, a division of a state-owned Chinese conglomerate.

He stepped down "in order to minimise any possible adverse impact on the company of certain reports recently published by the media on his family background", said a company notice Wednesday to the Hong Kong stock exchange.

As Chongqing's Communist Party chief, Bo launched a high-profile "Red revival" that included the public mass singing of Communist revolutionary songs.

He also launched a fierce anti-crime crackdown that critics say got out of hand and led to the widespread trampling of legal rights.

The Bo affair has proven a massive embarrassment to the Chinese government, which had been keen to project an image of unity and rectitude as it gears up for the sensitive, once-a-decade transition to a new leadership line-up later this year.