This has prompted an intense struggle for control of the Chinese armed forces, the Times said, quoting two unnamed people with 'leadership connections.'

Jiang's offer to quit as chairman of the Central Military Commission might give Hu Jintao -- who succeeded Jiang as head of the Communist Party and president of China in 2002 -- a chance to become the country's undisputed top leader, the report said.

But whether Jiang genuinely wants to step down and allow Hu to command the army and the ruling party or is using it as bargaining position at a meeting now in progress at a government compound in Western Beijing remains to be seen, the Times said.

Special China The passing of the baton 

'Thus, one official said, it is possible that Mr Jiang, 78, has calculated that he will be called on to remain military chief or to hold another position of influence,' the Times said.

The meeting precedes a national party later this month, likely to be most contentious since the partial transfer of power to younger leaders in 2002, said the article quoting people who were told about the proceedings. 

Hu Jintao elected China's president  

While Hu and Jiang have not publicly sparred over domestic or foreign policy, they are widely though to represent different schools of thinking on some major issues like managing relations with Taiwan and political change in Hong Kong, the Times said.

'If Mr Hu, who is 62, were to gain control of the armed forces, he could potentially carry out an agenda that some analysts say is more open to change at home and possibly less truculent in managing local hot spots like Hong Kong and Taiwan,' it said.