Beijing plans to restructure its $300 billion sovereign wealth fund, China Investment Corporation (CIC) , by spinning off its domestic investment arm, among other changes, a Chinese newspaper reported on Thursday, without citing sources.

Talk has swirled for months that Beijing may restructure the sovereign fund, although the motivations for the plan are not clear. Some say it is political jockeying, while others say Beijing wants to tighten its grip on the financial sector.

Last month, sources told Reuters that CIC could be stripped of its domestic arm, Central Huijin Investment Ltd, to allow the unit to come under the purview of a proposed new financial regulator.

Huijin holds Beijing's stakes in key domestic state-owned financial institutions, while the rest of CIC's operations are mainly focused on foreign investments.

According to paper China Business News, the proposal was submitted to China's State Council by a few central government departments, including the Ministry of Finance (MOF).

The government first plans to set up a new entity, CIC International, which will concentrate on the fund's overseas investments.

Huijin's accounts, which are currently included in CIC's books, will be reported separately, China Business News said.

CIC will retain a controlling stake in both Huijin and CIC International.

The central bank will directly inject some 100 billion yuan ($15.68 billion) of new funds into CIC International, but the exact size of the capital injection has not yet been confirmed, the newspaper said.

Under the plan, the MOF and the central bank will also become direct stakeholders in CIC International, the newspaper said.

CIC was not immediately available for comment.

Some analysts have said that it makes sense for Beijing to separate Huijin from CIC as that would elevate Huijin's status within the Chinese bureaucracy, giving it more power as the largest shareholder of China's banks.

Such a split could benefit CIC by permitting it to focus on foreign investments, putting it in a better position to manage another chunk of China's $3.2 trillion foreign exchange reserves.

CIC was set up with the aim of investing a part of China's reserves, the world's largest, in riskier assets to improve returns. About a third of the reserves are currently invested in U.S. Treasuries.

(Reporting by Carrie Ho and Kazunori Takada; Editing by Jonathan Hopfner and Don Durfee)