Libya suspends pro-reform newspaper

* Paper is allied with reform-minded son of Libyan leader

* It published article alleging government corruption

* Reformers and conservatives in power struggle

RABAT, Nov 4 (Reuters) - The Libyan government has suspended printing of a newspaper controlled by a reformist son of leader Muammar Gaddafi, local media reported, in what could be the latest phase in a power struggle inside the oil exporting state.

The print version of the Oea newspaper, controlled by Saif al-Islam Gaddafi, was suspended soon after it published an article calling for a “final assault” on the government which it alleged had failed to tackle corruption, local media said.

Saif al-Islam -- who played a key role in ending sanctions on Libya and is seen as a possible successor to his father -- has been waging a turf war with a conservative old guard and has been openly critical of the government.

“(Prime Minister) Al-Baghdadi Ali al-Mahmoudi has suspended the publication of the weekly Oea,” the prime minister’s office said in a statement that was printed by three Libyan newspaper websites. It did not give a reason for the suspension.

Government officials could not be reached for comment and there was no immediate confirmation from the Al Ghad media group, which was founded by Saif al-Islam and which owns Oea and several other titles.

Oea, which was still available in its Internet version, has helped spearhead a limited opening up of freedom of speech in Libya, printing articles alleging official corruption and incompetence that a few years ago would have been unthinkable.

The newspaper, and a sister title, were absent from newsstands for six months earlier this year. The papers’ managers said they were forced to stop printing under pressure from the authorities, but they resumed in July. [ID:nLDE6671WP]

Since then, tensions between the government and Saif al-Islam have re-surfaced. He accused the government in September of ineptitude and said “There is no state in Libya.” [ID:nLDE68S2FP]

The rivalry in oil exporter Libya is watched closely by Western oil majors including BP BP.L, Eni ENI.MI and Exxon Mobil XOM.N.

They have poured billions of dollars into Libyan oil and gas projects and some analysts say their investments could be jeopardised by shifts in the political landscape.

Even with the suspension of Oea, Saif al-Islam and his allies still control the most powerful media group outside government control. Al Ghad also owns the Quryna weekly, a radio station and the Libya Press news agency. (Writing by Lamine Ghanmi; Editing by Giles Elgood)