26 April 2012 Last updated at 08:37 GMT
Bo Xilai ran a wire-tapping system that extended as far as China's president, the New York Times has reported.
Citing "nearly a dozen people with party ties", it said the disgraced Mr Bo ran a wire-tapping network across Chongqing, where he was party chief.
His officials even listened to a phone call involving Hu Jintao, it said.
Chinese authorities have not mentioned wire-tapping in reports about Bo Xilai, whose wife is being investigated over the death of a British national.
They are investigating Mr Bo over "serious discipline violations", while his wife, Gu Kailai, has been detained as a suspect in the death of Neil Heywood, the British businessman found dead in Chongqing in November 2011.
Chinese authorities say they believe Mr Heywood was murdered.
Mr Bo - a high flier once expected to reach the top echelons of office - has not been seen in public since he was removed from his political posts, in the biggest political shake-up in China in years.
Bo Xilai's wire-tapping operation began several years ago as part of an anti-crime campaign in Chongqing, the New York Times said.
It was handled by Wang Lijun, the police chief whose flight to the US consulate in February signalled the start of Mr Bo's downfall, and expanded into targeting political figures.
The police chief conducted regular security sweeps of four hotels in the city, which were often used by Mr Bo and his associates. The establishments included the Nanshan Lijing Holiday Hotel where British businessman Neil Heywood died last November.
One source - with close links to the police and Chongqing authorities - told the BBC that Wang Lijun would have food tested at hotels where he ate apparently because he feared poisoning. The police chief also travelled with his own security detail when in the city.
As for Bo Xilai, the politician rebuilt the government compound when he became Chongqing's party secretary in 2007. According to the source, that included building an underground tunnel to his office complex.
Last year, the paper reported, "operatives were caught intercepting a conversation between the office of Mr Hu and Liu Guanglei, a top party law-and-order official whom Mr Wang had replaced as police chief".
A conversation between Minister of Supervision Ma Wen, who was visiting Chongqing, and Mr Hu himself was also monitored, the paper said.
Authorities in Beijing found out and began investigating, straining the relationship between Mr Wang and Bo Xilai.
The wire-tapping "was seen as a direct challenge to central authorities", the newspaper reported, citing party insiders.
Reuters news agency reported last week, citing an unidentified source, on Wang Lijun's involvement in a sophisticated surveillance and bugging operation in Chongqing.
It said this week that the monitoring helped Mr Bo and Mr Wang thwart central government investigations, again citing unidentified sources.
On the telephone call involving Hu Jintao the agency, citing a local source in Chongqing, said Mr Bo had explained the move as an equipment mistake.
These new claims will add to the sense that this scandal has exposed deep rifts and mistrust at the very highest level of China's Communist Party, reports the BBC's Damian Grammaticas from Beijing.
Also important were fears that Mr Bo, seen as a divisive populist, could not be trusted if elevated to the highest levels in the party, our correspondent adds.
Bo Xilai's fall from grace comes with China due to begin its once-in-a-decade leadership change in October.
Since the scandal erupted, the lifestyle and political and business dealings of he and his family have come under intense media scrutiny.
His brother has resigned as director of a Hong Kong-based company, a day after his son issued a statement defending his lifestyle.