The whereabouts of late North Korean leader Kim Jong-Il's eldest son, once seen as the natural successor in the communist dynasty, has become a subject of intense speculation since his father's death.

Kim Jong-Nam is believed to have lived a life of reclusive luxury, mainly in the Chinese gambling hub of Macau, since he was caught in 2001 entering Japan on a fake passport saying he wanted to take his family to Disneyland.

Apparently banished by his father and North Korea's secretive ruling elite, Jong-Nam, 40, has watched from afar as his young half-brother, Kim Jong-Un, has been groomed since 2009 to succeed his father as the nation's leader.

Jong-Nam's movements since the announcement of his father's death on Monday could give clues about the machinations in Pyongyang during the sensitive transition of power in the impoverished, nuclear-armed state.

But Macau-based observers say he has remained below the radar.

"He's moving here and there. It has been hard to track him down," said Ricardo Pinto, publisher of Macau Closer magazine, who keeps an eye on Jong-Nam's comings and goings in the former Portuguese colony.

"It appears that he lives at his house sometimes, and sometimes he stays at different hotels. There's no indication where he is living now."

Jong-Nam's last public appearance was in January this year, when he gave an interview to Japanese newspaper Tokyo Shimbun at an unspecified location in southern China.

He told the paper that Kim Jong-Il, who took power in 1994 after the death of his father, North Korea's founder and "great leader" Kim Il-Sung, was against a third-generation succession.

But the late leader had anointed Jong-Un -- aged in his 20s and relatively inexperienced -- to ensure national stability, he said.

"Hereditary succession did not happen even under Chinese chairman Mao Zedong," said Jong-Nam, sporting funky brown plastic glasses, a light pink shirt and a black jacket.

"(Heredity succession) does not fit socialism and my father was against it. "I understand that it was done in order to stabilise the framework of the nation," he said, warning that instability in North Korea would disrupt the "surrounding region".

While most Kim-watchers agree Jong-Nam has used Macau as a base since his aborted Disneyland adventure, he is also reported to have stayed in Beijing and to have regularly visited Austria, France and Thailand, as well as North Korea.

Analysts say the passing of power to a new generation could provide an opening for reform and improved relations with the outside world.

They point out that Swiss-educated Jong-Un is the first leader in two generations to have had any experience of life in the West.

Jong-Nam was also educated at a Swiss boarding school, but his years as a gambling, drinking free spirit in exile may have corrupted him too much in the eyes of the ruling elite back in austere Pyongyang, analysts say.

"He has been in exile for too long and has no more political base in North Korea," said Joseph Cheng, a political analyst from Hong Kong's City University.

"It's very unlikely he will have any role."

In the late nineties, the eldest of Kim Jong-Il's three sons was the heir apparent, holding senior jobs including general and head of foreign counter-intelligence.

Jong-Nam's resume makes him a better choice as North Korea's next leader over his half brother. But the eldest Kim, whose film-star mother died in 2002, has expressed no interest in North Korea's highest office.

"If I were the successor, would you see me in Macau wearing these casual clothes and taking a holiday? I am only the son of Kim Jong-Il," he told a Japanese television reporter in 2009.

In his most recent interview, Jong-Nam said his "heart aches" when he heard about the hardship suffered by poverty-hit North Koreans.

He urged the country's leaders to "pay attention to reform and openness".

"What the North desires the most is the normalisation of ties with the US and settlement of peace on the Korean peninsula," he told Tokyo Shimbun.

Some analysts had seen second son Kim Jong-Chul as favourite to take over, but the late Kim reportedly thought of him as too effeminate for leadership.