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A method of preparing a composite cathode active material having superior cell characteristics includes mixing and milling starting material, carbon and an organic complexing agent. The mixture is heated at a first temperature in an inert atmosphere to form a composite precursor, and then the precursor is ground and heated at a second temperature in an inert atmosphere to produce a carbon-containing composite cathode material having high electronic conductivity. The said composite cathode has a general formula of LiFe1−xMxPO4—C, within 0≦x<1, M is selected from the group consisting of Co, Ni, V, Cr, Mn and a mixture thereof.