BANGKOK (Reuters) - Thailand's foreign minister has quit, local media reported on Wednesday, dealing another blow to Prime Minister Samak Sundaravej a day after he invoked emergency rule against protesters seeking to unseat him.
Tej Bunnag, a retired diplomat appointed in July, resigned after completing his mission to repair relations with Cambodia after a temple row that forced out his predecessor, a television channel and news Web sites said.
Tej once served in King Bhumibol Adulyadej's principal private secretary's office, and his departure could be seen as the revered monarch expressing his reservations about Samak's administration.
News of the resignation came a day after Samak invoked emergency rule in Bangkok to quash intensifying street protests against his seven-month old administration.
"If it is true, it is another step toward the end of this falling government," Ramkhamhaeng University analyst Boonyakiat Karavekphan said of Tej's reported resignation.
Samak, who has refused to bow to protesters occupying his official compound for nine days, declared emergency rule on Tuesday after clashes between his supporters and anti-government protesters killed one man and injured 45.
Hundreds of riot police were outside the Government House compound on Wednesday but made no move toward the thousands of protesters who are camped inside, singing and chanting anti-government slogans.
The anti-government People's Alliance for Democracy (PAD) -- a motley coalition of businessmen, academics and activists who accuse Samak of being an illegitimate proxy of former Premier Thaksin Shinawatra -- have vowed to stay until Samak steps down.
The PAD paints itself as a defender of the revered King and accuses Thaksin and the government of seeking to turn Thailand into a republic, charges they deny.
A public sector strike to pile pressure on the embattled prime minister failed to disrupt electricity, water and transport services in the city of 10 million people on Wednesday.
Thailand's biggest power producer, EGAT, said it was business as usual at its power plants as most staff showed up for work.
Bus routes were operating as normal, as well as the city's skytrain and underground subway.
Bangkok's main airport remained open, but flights to the southern city of Hat Yai were disrupted for a second day after protesters blocked roads to the airfield.
Tour companies have reported cancellations since the protests intensified last week, hurting a tourism sector that generates the equivalent of 6 percent of GDP and is a major employer.
Army chief Anupong Paochinda's refusal to use force to evict thousands of protesters at Government House, despite a decree that banned public gatherings and gave his soldiers police powers, has annoyed the government.
"He is in neutral gear," a senior government source said.
"The government doesn't wholeheartedly believe the military would not interfere in politics. They are always looking for reasons to stage a coup," the source said.
Anupong, among the generals who ousted Thaksin in 2006 only to see Thaksin's allies return to power in Samak's six-party coalition government, has said repeatedly a coup cannot solve Thailand's political problems.
The crisis has distracted the government at a time when the country faces slowing growth and high inflation, prompting exasperated investors to park their money elsewhere.
The baht was at 34.43 per dollar after hitting a one-year low of 34.52 on Tuesday after the emergency was invoked. The main stock index fell nearly 1.5 percent on Wednesday and is down 25 percent since the protests began in May.
Some analysts believe Samak could call a snap election as a last resort, despite his recent refusal to dissolve parliament.
The legislative body began debate on a new, $53 billion national budget on Wednesday. It would replenish government coffers for an election campaign, which Samak's allies are almost certain to win on the back of strong support in the countryside.
(Additional reporting by Vihoon Amorn and Raju Gopalakrishnan;
Writing by Darren Schuettler; Editing by Paul Tait)