(adds details from Xinhua)
BEIJING, April 1 (Reuters) - China has charged former senior army officer Gu Junshan with corruption, state news agency Xinhua said, in what is likely to be the country's worst military scandal since a vice admiral was jailed for life for embezzlement in 2006.
In a renewed campaign on graft, Chinese President Xi Jinping has vowed to go after both powerful "tigers" and lowly "flies", warning that the issue is so severe it threatens the ruling Communist Party's survival.
Gu has been charged with corruption, taking bribes, misuse of public funds and abuse of power, Xinhua said on one of its official microblogs on Monday. He will be tried by a military court, it added.
Three sources with ties to the leadership or military, speaking on condition of anonymity, said Gu also sold military positions.
Gu has been under investigation for corruption since he was sacked as deputy director of the logistics department of the People's Liberation Army (PLA) in 2012, sources have said.
Sources told Reuters this month that Xu Caihou, 70, who retired as vice chairman of the powerful Central Military Commission last year and from the Communist Party's decision-making politburo in 2012, was under virtual house arrest while helping in the probe into Gu.
As one of Gu's main supporters in his rise through the ranks, Xu is being implicated in ignoring, or at least failing to report, Gu's alleged misdeeds.
Reuters has not been able to reach either Xu or Gu for comment. It is not clear if they have lawyers.
In a separate story late on Monday, Xinhua said that military anti-corruption teams had uncovered a "number of important issues" in housing sales, land transfers and the appointments of cadres.
In January, the respected Chinese magazine Caixin said investigators had seized objects, including a solid gold statue of Mao Zedong, from Gu's mansion in the central province of Henan.
He also secured professional favours for members of his family, including his brother Gu Xianjun, who was arrested last August for bribery, the magazine said.
In addition, Gu hired authors to concoct heroic tales about his father's revolutionary deeds in a bid to bolster his image in the eyes of China's red aristocracy - the sons and daughters of Mao-era heroes, Caixin said.
China stepped up a crackdown on rampant corruption in the military in the late 1990s, banning the PLA from engaging in business. But it has engaged in commercial dealings in recent years due to a lack of checks and balances on the military, sources say.
In 2006, disgraced vice admiral and deputy navy commander Wang Shouye was jailed for life for embezzling 160 million yuan ($25.82 million) in China's biggest military corruption scandal in almost six decades, state media said at the time.
The party has struggled to contain public anger at a seemingly endless stream of corruption scandals, particularly when officials are seen as abusing their posts to amass wealth. (Reporting by Ben Blanchard, Benjamin Kang Lim and Sui-Lee Wee; Editing by Clarence Fernandez and Alex Richardson)