By Benjamin Kang Lim and Ben Blanchard

BEIJING (Reuters) - China's Communist Party said on Tuesday it had launched a corruption investigation into former domestic security chief Zhou Yongkang, one of the country's most influential politicians of the last decade, in a case that has its origins in a party power struggle.

Zhou, 71, is by far the highest-profile figure caught up in President Xi Jinping's crackdown on corruption. Indeed, Zhou is the most senior Chinese official to be ensnared in a graft scandal since the party swept to power in 1949.

He was a member of the Politburo Standing Committee - China's apex of power - and held the post of security tsar until he retired in 2012.

A brief statement released to coincide with a regular party meeting said Zhou was being investigated for suspected "serious disciplinary violations", the usual euphemism for corruption, although it could also imply additional wrongdoing.

"Jiang Zemin, Hu Jintao and Xi Jinping reached a consensus to deal with Zhou Yongkang for violating party discipline," a source with ties to the leadership told Reuters, referring to President Xi and his predecessors.

The source said Zhou had been accused of corruption involving family members and accepting bribes to promote officials.

"Not all charges against Zhou would be made public," added the source, who requested anonymity to avoid repercussions for speaking to a foreign reporter without authorisation.

Zhou, who was last seen at an alumni celebration at the China University of Petroleum on Oct. 1, could not be reached for comment. It was not clear if he has a lawyer.

Reuters reported in early December that Zhou had been placed under virtual house arrest after Xi ordered a special task force to look into corruption accusations against him.

Reuters also reported in March that Chinese authorities had seized assets worth at least 90 billion yuan ($14.56 billion) from family members and associates of Zhou. More than 300 of Zhou's relatives, political allies and staff had been taken into custody or questioned, sources who had been briefed on the investigation told Reuters.

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Zhou's son Zhou Bin had also been arrested, the influential Chinese magazine Caixin reported on its website after news of the investigation into his father had been made public.POWER STRUGGLE

But Zhou Yongkang's case is also about power.

Sources with ties to the Chinese leadership have previously told Reuters that Xi has been determined to bring down Zhou for allegedly plotting appointments to retain influence ahead of the 18th Party Congress in November 2012, when Xi took over the party.

Zhou had nominated Bo Xilai, a charismatic politician with leadership ambitions, to succeed him as domestic security chief and had tried to orchestrate the younger man's promotion to the Standing Committee, the sources have said.

Bo later fell in a divisive scandal following accusations his wife murdered a British businessman in 2011. Bo's wife was convicted over the killing and Bo himself was jailed for corruption and abuse of power last year.

Xi has made fighting pervasive graft a central theme of his administration and has promised to go after "tigers" - or senior officials - as well as those of lower rank who are implicated in corruption.

In ordering the investigation into Zhou, Xi has broken with an unwritten understanding that members of the Politburo Standing Committee would not come under such scrutiny after retirement.

The investigation shows that Xi, who became president in March 2013, has consolidated power and has the confidence to manage any internal rift that may ensue, experts said.

"He has taken down many others, and now he has reached the point where he can take down such a major figure," said historian and independent political commentator Zhang Lifan. "Behind taking down tigers, there lies a power struggle."

It was unclear if Zhou would eventually be indicted.

"If that happens, there won't be a high-profile trial like Bo Xilai's," the source with ties to the leadership said, referring to the purged party boss of the southwestern metropolis of Chongqing, whose trial the government provided regularly updated - though likely censored - transcripts for.

Any trial could also be some way off. Zhou would first have to be expelled from the party and then have formal criminal charges filed against him, which could take several months or longer.

GROWING CRACKDOWN

During his five-year tenure as security chief, Zhou oversaw the police force, civilian intelligence apparatus, paramilitary police, judges and prosecutors. Under his watch, government spending on domestic security exceeded the defense budget.

But Zhou became too powerful, sources with ties to the leadership have said, and that position was downgraded during a reshuffle in 2012 in which his successor was made a member of the Politburo, a 25-member body which reports to the Standing Committee.

The announcement of the investigation shows that Xi's anti-corruption crackdown is gathering steam.

Last month, the party said it would court-martial one of its most senior former military officers, Xu Caihou, also on charges of corruption.

The party has already gone after several of Zhou's proteges, including Jiang Jiemin, who was the top regulator of state-owned enterprises for just five months until last September when state media said he was under investigation for graft.

Jiang was previously chairman of state-owned China National Petroleum Corp (CNPC) - Zhou's power base - as well as one of its subsidiaries, oil-and-gas behemoth PetroChina. Zhou served as CNPC's general manager from 1996-1998, having risen through the ranks.

PRAISE FOR XI

Zhou joined the Politburo Standing Committee in 2007 while also heading the central Political and Legal Affairs Committee, a sprawling body that oversees law-and-order policy. He quickly earned the enmity of Chinese dissidents.

"Zhou has always been an enemy of the people," said Hu Jia, one of China's most prominent human rights activists.

"But Xi Jinping's investigation of Zhou isn't for human rights or to oppose corruption. This is a power struggle."

China's popular Twitter-like service Weibo, where for months mention of Zhou's name has been scrubbed by censors, lit up after the announcement of the investigation, with many praising Xi's decisiveness, though Zhou was never a popular figure in the country.

"President Xi, the entire country supports you in this," wrote one user.

After years in the oil industry and related ministries, Zhou went on to run the teeming and huge southwestern province of Sichuan, before being named public security minister in 2002.

There, Zhou made waves early on, taking the unprecedented step of sacking hundreds of police to stamp out a drinking culture, but later endeared himself to the force by creating a more professional, more powerful body.

Still, his time in charge of domestic security saw a huge swelling in the number of "mass incidents" - China's euphemism for public protests - fuelled by frustration at a yawning wealth gap and official corruption, despite the fact the party cracked down hard on dissent. ($1 = 6.1800 Chinese yuan)

(Additional reporting by Megha Rajagopalan and Michael Martina; Editing Dean Yates)