Red shirts take over "richest part" of Bangkok

BANGKOK (Reuters) - Thailand's "red shirts" congregated in their tens of thousands at an upmarket Bangkok shopping district on Wednesday, preparing a "final battleground" in their fight to oust army-backed Prime Minister Abhisit Vejjajiva.

About 40,000 had gathered by evening as the prospect of further impasse looked set to hit growth in Southeast Asia's second-largest economy after clashes on Saturday killed at least 22 people, Thailand's worst violence in 18 years.

"We will use the Rachaprasong area as the final battleground to oust the government," protest leader Nattawut Saikua told reporters, referring to the hotel and shopping district a couple of blocks from Bangkok's financial area. "There will be no more negotiations."

The red shirts, who have vowed "final" days of reckoning before, want Abhisit to quit office and dissolve parliament ahead of new elections.

Abhisit has kept an unusually low profile, with no public appearance since his last televised broadcast from an army barracks on Monday. The lack of response has added to a sense of anxiety about what his administration may do next to try to resolve the deadlock.

Red shirts and their vehicles spilled over a few blocks around the main Rachaprasong intersection. Some were setting up tents at another junction next to the business district on Silom Road.

"We are staying here until this government is gone," said Ratchada Pumsin, a 46-year-old housewife from the outskirts of Bangkok. "I think our chance of winning is high."

The mood was festive on the second day of the three-day Thai New Year called Songkran in which people douse each other with water and flour in the happiest holiday in the calendar.

Soaked red shirts were singing and swaying to live music on stage. Enterprising business people sold food and clothes on the streets, while some offered foot massages on plastic sheets.

Rachadumri Road, one of Bangkok's most affluent areas and home to the top hotels, has been transformed into a resting area and parking lot for protesters.

At an intersection against a backdrop of Louis Vuitton and Burberry billboards, red shirts gathered on the ground listening to protesters taking turns on the stage, making fiery speeches and condemning the government for the violence on Saturday. "We have taken over the richest and most expensive part of Bangkok," said Nattawut. "We have brought the prai (serfs) to take over ammart (elite) land. This is definitely a victory for democracy by the people for the people."

FACEBOOK PROTEST

At Victory Monument several kilometers away, more than 1,000 counter-protesters gathered briefly, calling for peace and showing support for the government.

"We met on Facebook and we agree the red shirts need to go because they are causing trouble for Bangkok. We want to show that they are not the only ones with political rights," said a female participant who asked not to be named.

The red shirts' decision to gather in one place gave them a strategic advantage, said Sombat Thamrongthanyawong, a political analyst at the National Institute of Development Administration.

"It's safer for them in the Rachaprasong area, and with a large crowd, chances of the security forces moving in are slim," he said.

The area is home to Central World, the second-largest shopping complex in Southeast Asia, and other big malls, which shut their doors when the protests began.

"They are holding the economy as their hostage," said Ramkhamhaeng University political scientist Boonyakiat Karavekphan.

Investment bank Morgan Stanley calculates economic growth this year could be cut by 0.2 percentage point due to the impact on tourism, which accounts for 6 percent of gross domestic product in the "Land of Smiles" and employs 1.8 million people.

YELLOW SHIRTS TO MEET

Yellow shirts, whose street protests led to the ouster of the government backed by former prime minister Thaksin Shinawatra in 2008, will meet on Sunday to discuss how to end the "terrorism" gripping Bangkok.

"We don't think the dissolution of parliament will resolve the problem," Suriyasai Katasila, leader of the yellow-shirted People's Alliance for Democracy, told Reuters.

Tension could flare again when the holiday ends, and financial markets are likely to see renewed selling when they reopen on Friday.

Abhisit, who had been expected to ride out the storm, appears more vulnerable now after the surprise announcement this week of an investigation into possible corrupt funding of his party and comments from the army chief that only polls could end a crisis that has gripped Thailand since 2006.

Abhisit has said he could call elections by the end of the year, although his hand could be forced by the recommendation this week from the Election Commission that his Democrat Party should face charges of illegal funding.

If a court upholds the charges, Abhisit, who came to power in 2008 when the army brokered a deal in parliament, could be banned from holding office and Thailand's oldest political party could be dissolved. Any prosecution could take months, however.

Chumpol Silpa-Archa, leader of the Charthai Pattana party, said coalition partners still supported Abhisit.

"We have no intention to pull out, but we want to see a clear roadmap to resolve the crisis, which eventually leads to a dissolution of parliament," he said.

Coalition partners have been calling on Abhisit to dissolve parliament within six months.

Deputy Prime Minister Suthep Thuagsuban ordered police to hunt for "terrorists" the government blames for the killings in the old quarter on Saturday. More than 800 people were injured in the army's failed attempt to eject protesters from that site.

The streets are still stained with blood, and makeshift Buddhist shrines have been set up near wrecked army personnel carriers daubed with Thai graffiti, such as "tyrant Abhisit."

(Writing by Nick Macfie; Additional reporting by Damir Sagolj, Adrees Latif and Nopporn Wong-Anan; Editing by Jerry Norton)