An expatriate British businessman murdered in China was passing information to MI6 about a powerful Communist Party boss, it has been reported.

Neil Heywood was said to have met regularly with an MI6 officer in China and provided details about the private affairs of the now disgraced Bo Xilai, according to The Wall Street Journal (WSJ).

In August Mr Bo's wife, Gu Kailai, was convicted of poisoning Mr Heywood in a hotel room in the city of Chongqing, where her husband was the party chief, in a case which rocked the Communist Party establishment.

Although she was said to have killed him because she thought he had threatened her son over a business dispute, the case has been dogged by speculation that Mr Heywood was working for British intelligence.

In an attempt to quell the rumours, Foreign Secretary William Hague took the rare step of issuing a statement saying the businessman was "not an employee of the British Government in any capacity".

However the WSJ said that while it was "technically true" to say that he was not working for MI6, he was a "wilful and knowing informant".

The paper said that its investigation, based on interviews with current and former British officials and close friends of the murdered man, found that a person Mr Heywood met in 2009 subsequently acknowledged to him that he was an MI6 officer.

Mr Heywood was said to have gone on to meet regularly with his MI6 contact and to pass on information about Mr Bo, whose family he was reported to be close to.

The MI6 officer was said to have described him to a former colleague as "useful" - adding of the intelligence reports based on Mr Heywood's information that "a little goes a long way".

The Foreign Office would not comment on the report. "We don't comment on security matters," a spokesman said.

The Press association, photo by BradNelson