Investigators have said that the wife of the disgraced Chinese politician Bo Xilai has confessed to killing the British businessman Neil Heywood, according to the Japanese newspaper Asahi Shimbun.

Gu Kailai was detained because she was "highly suspected" of killing Heywood following a row over an unspecified financial conflict, according to official reports. A family employee, Zhang Xiaojun, is also being held.

It would be extremely rare for such a high-profile and politically well-connected figurenot to be tried after being publicly named as a suspect in such a serious crime. Experts on the Chinese legal system have assumed since the announcement of Gu's detention that she will go to trial and be convicted.

The timing of the report is striking, coming only days after Cambodian police said China had requested the extradition of Patrick Devillers, a French architect who also had links to Gu and Bo.

On Friday, Reuters quoted the Cambodian foreign minister as saying that Devillers would not be extradited to any country.

"The Royal Government of Cambodia has already made decision to keep this French national in Cambodia … Neither sending to France or China," Hor Namhong said.

He added that the architect remained in custody pending further investigation.

Chinese officials have said they have no information on the Devillers case and it is unclear on what grounds they were seeking his extradition.

Asahi Shimbun said officials who had read an interim investigation report had told it of Gu's alleged confession. According to the investigation, Gu was illicitly receiving money and transferred as much as $6bn (£3.8bn) to accounts in the names of relatives and friends overseas. It is claimed she admitted killing Heywood to stop him revealing that he had helped her funnel money abroad.

Friends of Heywood have questioned his involvement in such activities and point out that he was not a wealthy man – as one might have expected if he was handling billions of dollars.

According to the Asahi Shimbun, Gu was already under investigation for financial impropriety when Heywood was found dead in a hotel in Chongqing, where Bo was party secretary, last November. She said she had felt "driven into a corner" when authorities began investigating her affairs and explained how she had killed Heywood.

The party's central leadership began reinvestigating Heywood's death after Bo's former ally and police chief, Wang Lijun, fled to the US consulate in Chengdu. He is understood to have told officials Bo turned on him after he said he suspected Gu was responsible.

The sources said authorities were also examining whether Bo – who is accused of "severe disciplinary violations" – was aware of his wife's actions. They detained dozens of people associated with him, including drivers and aides who worked for him when he was mayor of north-eastern Dalian in the 1990s, and questioned hundreds of people who had dealt with him, including business people and figures from the entertainment world.