A Chinese insurance giant threatened legal action on Monday over a media report linking a key government decision about the firm to shareholdings held by relatives of Premier Wen Jiabao.

The New York Times said Sunday that the chairman of Ping An Insurance wrote personally in 1999 to Wen, who was vice-premier at the time, and met his wife as the government mulled a decision on whether to split up the company.

After the lobbying, it said, the government granted Ping An a waiver from a requirement that large financial companies be broken up.

Following the decision an investment vehicle -- later controlled by relatives of Wen -- bought shares in Ping An at a significant discount, long before most other investors could buy into the stock, the report said.

The company has since grown to become China's second-largest life insurer, and the Wen family shareholdings rocketed in value, peaking at $2.2 billion in 2007, the paper reported.

Last month The New York Times reported that financial records showed Wen's relatives had controlled assets worth at least $2.7 billion, a report China branded a smear.

Ping An said in a statement Monday that "recent media coverage related to the company" contained "serious inaccuracies, facts being distorted and taken out of context, as well as flawed logic".

It "will take appropriate legal action commensurate with the damage and adverse impact the media reports have caused to the company", the statement said, without elaborating.

A Ping An spokesman confirmed to AFP that the statement was a response to The New York Times report.

Wen is the latest senior Chinese official whose family have reportedly become massively wealthy as China's economy has boomed.

Earlier this year the Bloomberg news agency estimated the family of Xi Jinping -- who was appointed head of the ruling Communist Party this month, and is expected to be named president in March -- had assets worth $376 million.

Neither of the reports alleged wrongdoing by the officials, but both were blocked in China, with the Bloomberg and New York Times websites still inaccessible to ordinary Internet users on China's mainland.

The censorship reflects fears that perceptions of corruption amongst top politicians, widely believed to have enriched their families by abusing their government connections, could fuel social unrest.

Xi said last week that corruption "is growing more intense and in the end will kill the party and the country".

Several senior officials said at the party's recent congress that politicians would reveal their assets in the future, without giving a timetable. China does not currently have laws clearly requiring officials to disclose their wealth.

A source close to Ping An confirmed that the company's chairman Ma Mingzhe wrote to Wen in 1999, when the government was considering breaking up the insurer, but said that the Times article had quoted the letter out of context.

The Times report said that top Ping An executives were concerned that the company was facing insolvency at the time, a claim denied by the source.

Asked by AFP about the reported meeting between Ma and Wen's wife Zhang Beili, Ping An said it had no comment.

The company added: "Ping An does not know the background of the entities behind our shareholders."

Ping An shares closed down 1.09 percent at HK$58.75 in Hong Kong on Monday and 0.32 percent lower at 37.00 yuan in Shanghai.

Asked about the New York Times report by an AFP reporter, Chinese Foreign Ministry spokesman Hong Lei said: "With regards to the report you have mentioned, we have already made our position clear."

Wen is expected to step down as premier in March, when he will be replaced by current Vice Premier Li Keqiang.