For decades, Beijing has maintained that the Dalai Lama is a separatist, but Tibet's exiled spiritual leader once had a special relationship with the father of Xi Jinping, the man in line to become China's next president.

Few people know what Xi, whose ascent to the leadership is likely to be approved at a Communist Party congress later this year, thinks of Tibet or the Dalai Lama.

But his late father, Xi Zhongxun, a liberal-minded former vice premier, had a close bond with the Tibetan leader who once gave the elder Xi an expensive watch in the 1950s, a gift that the senior party official was still wearing decades later.

The Dalai Lama, 77, recalls the elder Xi as 'very friendly, comparatively more open-minded, very nice' and says he only gave watches back then to those Chinese officials he felt close to.

"We Tibetans, we get these different varieties of watch easily from India. So we take advantage of that, and brought some watches to some people when we feel some sort of close feeling, as a gift like that," the Dalai Lama said in an interview in the Indian town of Dharamsala, a capital for Tibetan exiles in the foothills of the Himalayas.

The Dalai Lama gave the watch to the elder Xi in 1954 during an extended visit to Beijing. Xi was one of the officials who spent time with the young Dalai Lama in the capital where he spent five to six months studying Chinese and Marxism.

The Dalai Lama fled to India five years later, after a failed uprising against Communist rule, but as late as 1979, Xi senior was still wearing the watch, the make and style of which the Dalai Lama can no longer remember.

Xi senior was a dove in the party, championing the rights of Tibetans, Uighurs and other ethnic minorities.

He also opposed the army crackdown on the 1989 Tiananmen student protests and was alone in criticising the sacking of liberal party chief Hu Yaobang by the Old Guard in 1987. Xi senior died in 2002.

The Dalai Lama has never met Xi junior but his fondness for the father is, for some, a sign that China's next leader may adopt a more reformist approach to Tibet once he formally succeeds President Hu Jintao next March.

Some expect him to be more tolerant of Muslim Uighurs in the western region of Xinjiang, and also of Taiwan, the independently ruled island that China has vowed to take back, by force if necessary.

"To understand what kind of leader Xi Jinping will be, one must study his father's (policies)," said Bao Tong, one-time top aide to purged party chief Zhao Ziyang.

Bao was jailed for seven years for sympathising with student-led demonstrations for democracy centred on Beijing's Tiananmen Square in 1989.

"No (Chinese) Communist will betray his father," he added.

LIKE FATHER, LIKE SON?

Xi senior is looked on favourably by China's leaders with plans already made to commemorate his 100th birth anniversary in mid-October next year with a ceremony at the Great Hall of the People and editorials and commentaries in state media eulogising him, sources with ties to the leadership said.

But even if Xi junior wants to pursue a reform agenda, he is likely to bide his time.

"The key is whether Xi Jinping feels confident of his power consolidation," said Lin Chong-Pin, a former Taiwan defence minister and China policy-maker who now teaches at Taipei's Tamkang University.

Lin added, however: "There will be a more tolerant policy not only (towards) Tibet, but also Xinjiang."

Taiwan, the democratic island Beijing claims as its own, may be the model for reconciliation with Tibet.

"Every generation of (Chinese) leaders must resolve problems left over from the previous generation," a source with leadership ties said.

"For Hu, it was Taiwan," the source added, referring to Hu mending fences with the island after his predecessor, Jiang Zemin, threatened it with war games in the run-up to its first direct presidential elections in 1996.

"For Xi, it's Tibet," the source said.

Asked if Xi might take a different tack on Tibet, a retired party official who used to work in Tibet said: "There has to be new thinking ... He (Xi) is surely aware of the problems."

"More and more government spending, more and more security, is not going to buy enduring stability in Tibet," the official said, referring to China pouring billions of yuan to develop Tibet, including opening a railway in 2006 linking it with the rest of China, and a crackdown in the wake of the unrest.

"The high-pressure policies can't continue forever," the official said asking not to be identified and adding that these were his personal views.

CARDS HELD CLOSE

Xi has played his cards close to his chest and little is publicly known about his policies. Like Hu, he will be no political strongman, and will have to rule by consensus as the first among equals.

If Hu stays on as military chief, Hu may continue to hold sway over major policies, but is unlikely to oppose detente.

"Hu will not be an obstacle to (any) reconciliation" moves, a second source with leadership ties said.

Initially, Hu sought to make up for his decision to crush riots in Tibet in 1989 by issuing a decree to 'protect Tibetan culture' in the early 2000s, but was taken aback when the Dalai Lama accused China of 'cultural genocide'.

China has defended its iron-fisted rule in Tibet, saying the region suffered from dire poverty, brutal exploitation of serfs and economic stagnation until 1950 when Communist troops 'peacefully liberated' it and introduced 'democratic reforms' in 1959.

Tensions over the issue are at their highest in years after a spate of protests and self-immolations by Tibetan activists, which have led to an intensified security crackdown. Fifty-one Tibetans have set themselves alight since 2009.

In the event the Dalai Lama dies in exile, it could radicalise exiled Tibetan youth who have clamoured for independence and are frustrated with his 'middle way' approach that advocates autonomy within China.

It could create a rallying point for Tibetans disgruntled with Communist rule and leave a destabilising leadership vacuum.

"They (Chinese government) hope Tibet's political problem can be basically resolved once the Dalai Lama passes away," said Wang Lixiong, an author and expert on Tibet who has met the Dalai Lama several times.

Instead, Wang added, "the Dalai Lama's death could spark massive protests and even rioting."

'NORMAL HEARTS'

The outbreak of rioting in Tibet in 2008 ahead of the Beijing Olympics and a subsequent crackdown, which in turn sparked the self-immolations, may have prevented Hu from carrying out any reversal of China's hardline policy on Tibet.

At the time of the riots, Xi commented: 'We should have normal hearts' - a remark that was in stark contrast to insults rained on the Dalai Lama by the region's then Communist Party boss, Zhang Qingli, who called the 1989 Nobel Peace Prize winner a 'jackal in Buddhist monk's robes' with 'the face of a human and the heart of a beast'.

Zhang was not alone. Many Chinese party, government and military officials and many ordinary Chinese are convinced the 2008 unrest was a Western plot to demonise Beijing before the Games and try to split Tibet from China.

But tempers appear to have cooled a bit.

Hu is manoeuvring to promote one of his closest allies - Inner Mongolia party boss Hu Chunhua who speaks Tibetan, a rarity among Chinese officials - to the party's inner sanctum, two independent sources said, in a bid to retain clout after retiring. The two Hus are not related.

In a sign the party may at times be willing to reverse bad decisions or policies, it backed down recently after liberal intellectuals slammed it for forcing Tibetan Buddhist monasteries to put up portraits of Mao and other leaders, Columbia University Tibetologist Robbie Barnett said, adding that local officials now say this is voluntary.

Xi may have more to gain than lose from resuming talks with the Dalai Lama's envoys, but this may not happen anytime soon.

"They probably will take very small, incremental steps. They cannot take big steps," said Lin, the Taiwan-based academic.

Many challenges lie ahead.

"The talks process could start again at any point, we don't know. We shouldn't rule it out even though it looks very negative at the moment," Robbie Barnett, a Tibetologist at Columbia University, said in a telephone interview.

"He may have to prove that he's very tough ... so it could make it quite difficult for Xi. He could risk heavy attack from hardliners. It's quite complicated for him."

But Robert Lawrence Kuhn, author of How China's Leaders Think was more optimistic.

"He is a very practical, pragmatic, very down-to-earth kind of person," said Kuhn who has met Xi half a dozen times.

"I don't think he has an overblown sense of his own person, which to me is very important. People could rally around him."

The Dalai Lama has said he hopes Xi will usher in a 'realistic' and more open approach to Tibet, in the same way Deng Xiaoping introduced market reforms in the late 1970s that turned China into an economic powerhouse from a backwater.

After more than 50 years of confrontation with Beijing, the Dalai Lama is cautious but hopeful.

"I can't say for definite, but according to many Chinese friends, they say the new, coming leadership seems more lenient," he said in an interview in his audience room which was decorated with Buddhist paintings and a bust of Mahatma Gandhi.

He said there had been a stream of visitors to Dharamsala from China, including people who told him they had connections with senior Communist Party leaders.

"These are very, very encouraging signs," he said. "No formal talks, but there are sort of signs among the Chinese officials or top leaders."

Tibetan exiles see other small signs that Xi could take a softer line on Tibet - his wife is a Buddhist, and Xi went out of his way in 2006, while party boss of Zhejiang province, to host the first World Buddhist Forum in the provincial capital.

A batch of U.S. diplomatic cables obtained and published by WikiLeaks last year said the Dalai Lama had 'great affection' for Xi senior, and that Xi junior was quite taken with Buddhist mysticism at one point early in his career.

In July last year, Xi visited Tibet and pledged to crack down on the separatist 'Dalai clique' and 'completely smash any plot to destroy stability in Tibet and jeopardise national unity'.

But a Western diplomat in Beijing cautioned that this was standard language and should not be construed to be hardline. "No one wins prizes for saying the Dalai is ok," he said.

But many exiles are skeptical.

"I do not expect Xi junior to be like his father because he is facing a completely different situation, but I hope he can be different (from Hu Jintao)," said Khedroob Thondup, a nephew of the Dalai Lama who visited China more than 10 times with his father, Gyalo Thondup, as unofficial envoys of the Dalai Lama.

Another nephew, Tenzin Taklha, who is also a secretary to the Dalai Lama, said: "Even if it does happen it won't be substantial, just to show the world the door is open again."

The Dalai Lama, too, has yet to be convinced that Beijing will soften its stance on Tibet - even if Xi turns out to have the same moderate inclination as his father - and says political reformers sometimes do not last long in the Communist Party.

"These realistic people sometime live a very short life."