The reports came as the reported death of the Taliban chief was still shrouded in mystery.

Unofficially, a close aide said Friday that Baitullah died Wednesday with his wife and several guards when two missiles fired from US pilotless aircraft hit the house of his father-in-law.

Mehsud's official spokesman Hakimullah denied the reports Saturday. He told reporters the local Taliban chief was alive and had gone into hiding, like Afghan Taliban leader Mullah Omar and Al Qaeda chief Osama bin Laden.

Analysts believe Taliban are reluctant to confirm Baitullah Mehsud's death in order to conceal the internal rifts over choosing a new leader.

'They don't want to show that Baitullah's death has weakened them,' said Mehmood Shah, a defence analyst and former security chief in the tribal region.

A Taliban commander who spoke on condition of anonymity to DPA said the power struggle had halted the nomination of a new Taliban chief, postponing the planned announcement of Baitullah's death and his successor.

Most shura members had agreed to choose Hakimullah, but some wanted to honour Baitullah, who had wished to see Wali-ur-Rehman as his successor, the commander said. Rehman is Baitullah's first cousin and deputy.

The third contender is 50-year-old Azmatullah, a Taliban commander who is considered more moderate and mature than both young leaders, Hakimullah and Rehman.