Jang Song Taek, 63, head of the National Defense Commission, could be on a collision course with the ailing leader's anointed successor, his 26-year-old son.
South Korean television station YTN has been reporting that the North Korean leader has the nearly-incurable disease, citing information from South Korean and Chinese intelligence services.
Kim Jong Il has rarely been seen in public since last August, raising speculation about his health. During an appearance marking the 15th anniversary of his father Kim Il Sung's death on July 8 the 68-year-old dictator looked gaunt, according to the South Korean English-language daily newspaper Chosun Ilbo.
The North Korean government has also been trying to import medical equipment through intermediaries in China, the newspaper said.
Kim is said to have appointed his youngest son, Kim Jong Un, as head of the ruling Korean Workers' Party. South Korea's National Intelligence Service believes Kim Jong Un will officially be declared leader only in 2012.
But pancreatic cancer sufferers rarely survive more than one year, with very few living for five years. Kim senior's eventual death has raised fears of an unstable political situation in a country that claims to possess nuclear weapons. North Korea's latest nuclear test was in May and caused a 4.7 seismic event, observers have said.
The Intelligence Service told a session of South Korea's National Assembly that Jang Song Taek will probably not be content taking orders from Kim's young son and attempt to grab power, Chosun Ilbo noted. Jang Song Taek, who is also Kim's brother-in-law, is said to back Jong Nam, 38, Kim's eldest son who has been passed over as future leader.
Jang Song Taek studied in Moscow between 1969 and 1972 and steadily rose up government ranks to be vice director of the Workers' Party of Korea. Despite being purged from the job in late 2004, he re-emerged to accompany Kim Jong Il on a trip to China in 2006. He was elected head of the National Defense Commission, the de facto ruling body within the military regime, in April.
Jang's only daughter, Jang Keum Song, committed suicide while studying in Paris in September 2006. She had apparently refused to end a relationship opposed by her parents and disobeyed their orders to return to the North Korean capital Pyongyang.
The eldest son, Kim Jong Nam, has held senior positions within the Ministry of Public Security and reportedly been in charge of developing North Korea's computing industry with Chinese help.
He was arrested at Tokyo's Narita International Airport in May 2001 while travelling on a false Dominican Republic passport and accompanied by two women and a 4-year-old boy. While being held for several days he told police he was in Japan visiting Tokyo Disneyland. The Japanese government eventually deported him to China, causing embarrassment to the North Korean government.
In contrast to the elder Jong Nam, the young son Kim Jong Un has limited political experience. He reportedly attended the English-language International School of Bern in Switzerland under a false name in 1998, and few photographs of him exist.
In the event of Kim Jong Il's death, there could be a period of a regency-type rule with family or political friends taking decisions until Jong Un has enough experience, according to some analysts. Even if Jang Song Taek were to take power, it might be only for a limited time to establish the older brother as head of the regime and so continue the family dynasty along a different line.
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