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Communist Party chief Zhao Ziyang was placed under house arrest and stripped of his post as conservatives began a purge of liberals to gain control of the deeply fractured government, sources said Friday.

Zhao lost power in a bitter fight with conservative Premier Li Peng, the Chinese and diplomatic sources said. Peng last week ordered a crackdown on students, who are occupying Tiananmen Square to press demands for a freer society and cleaner government.Officials who have worked under Zhao to chart political and economic reforms will face disciplinary action with some losing their jobs, the sources said. Among those reported in trouble were the party's propaganda chief Hu Qili and Vice Premier Tian Jiyun.

The reports were not officially confirmed.

Zhao has been a leading proponent of market-oriented economic reforms championed by 84-year-old senior leader Deng Xiaoping, but the two differed over political change. Zhao has expressed clear sympathy with the student protesters' goals.

Deng ally President Yang Shang-kun told top officials Thursday that Zhao's actions "had a very bad effect" on the nation, a government source said.

Millions of Chinese throughout the nation have taken up the students' cause, with demonstrations erupting in dozens of cities demanding Li and Deng step down.

Chinese and diplomatic sources said Zhao was under house arrest. A document circulated Friday to county- and district-level party officials said Zhao was no longer head of the party, according to a diplomat who has proved reliable in the past.

No successor was named in the document.

Sources said conservatives accused Zhao of heading an anti-party clique, splitting the party, instigating disturbances, revealing party secrets, corruption and taking credit for Deng's achievements during the past decade of economic reform.

Two sources said National People's Congress Chairman Wan Li was under detention in Shanghai, and one source said a member of the party's decision-making Politburo was also under house arrest.

Li appeared on nationwide television Thursday for the first time in six days and defended his martial law decree.

Zhao has not appeared in public since May 19.

State-run newspapers on Thursday prominently displayed a letter from military commanders supporting the crackdown. Six of seven military districts also have backed the move.