BEIJING, Nov 5 (Reuters) - The yuan's de facto dollar peg to the dollar is unsustainable in the long run, but Chinese academics are deeply divided on what should replace it, a leading government researcher said on Thursday.

China let the yuan rise 21 percent against the dollar between July 2005 and July 2008 before effectively repegging the currency to help its exporters cope with a slump in global demand.

Zhang Yuyan, who heads the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, the government's top think-tank, said his department was studying alternative ways to manage the yuan.

'There are several options. One is to peg it to a basket of currencies; another option is a big one-off revaluation,' he told a forum organised by the Economic Information Daily.

'There is no perfect option,' he added, referring to the deep disagreements among academics. Zhang said China's exchange rate mechanism and currency policy would come under increasing pressure in the months ahead.

But, speaking later to journalists, he said China would not dump dollar assets -- a policy line that senior officials have consistently repeated despite their desire to diversify China's reserves away from the dollar.

(Reporting by Zhou Xin and Alan Wheatley; Editing by Andy Bruce)

((alan.wheatley@thomsonreuters.com; +86 10 6627 1235; alan.wheatley.reuters.com@reuters.net)) Keywords: CHINA ECONOMY/YUAN

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