Thailand's ex-PM Thaksin predicts guerrilla war

BANGKOK (Reuters) - Exiled former Thai Prime Minister Thaksin Shinawatra said on Wednesday that a military crackdown on protesters backing him could spawn mass discontent and lead to guerrilla warfare.

Thaksin, ousted in a bloodless 2006 military coup, is denounced by adversaries as Thailand's most corrupt politician. To his anti-government supporters, who set Bangkok ablaze on Wednesday, he is a savior.

Speaking from an undisclosed location, Thaksin said the crackdown on "red shirt" protesters, which killed six people and wounded 58, could degenerate into widespread violence.

"There is a theory saying a military crackdown can spread resentment and these resentful people will become guerrillas," Thaksin told Reuters as troops fought protesters in Bangkok, sparking violence in outer provinces.

"There are lots and lots of people across the country who are upset because they were prevented from joining the Bangkok rally."

His critics say Thaksin is a crony capitalist who plundered the economy and perverted democracy for the benefit of his family and friends while in power from 2001 until the 2006 coup.

But to many rural voters, he was the first leader to consider the needs of millions living beyond Bangkok's bright lights.

Thaksin, who scored two landslide poll wins, has been living abroad in self-exile since being removed.

But a two-month campaign by his supporters to oust the government of Prime Minister Abhisit Vejjajiva, hoping to gain Thaksin a political amnesty and justice, culminated on Wednesday in the country's worst political violence in 18 years.

Rioting and fires swept Bangkok after troops stormed the protesters' encampment, forcing their leaders to surrender.

Protesters set ablaze at least 27 buildings, including the Thai stock exchange and Central World, Southeast Asia's second-biggest department store complex.

A night curfew was declared in Bangkok and 21 provinces.

THAKSIN'S GHOST

Thaksin, 60, has hovered over Thai politics since fleeing the country in 2008, accused of undermining the powerful monarchy and breaching conflict-of-interest laws. He was sentenced in absentia to two years in prison.

Government officials say the multimillionaire former telecommunications tycoon was funding the protests to the tune of about $1.5 million a day. Both Red Shirt leaders and Thaksin

deny he funded the anti-government movement.

In his comments, Thaksin rejected any notion he was the stumbling block in failed talks between the government and protesters.

"I only gave them advice that they should make a collective decision as a group, not letting any individual leaders to make a decision by their own... I never discussed about my personal interests with them," Thaksin said.

Thaksin, a former policeman, is accused by critics of abusing his electoral mandate to systematically dismantle constitutional checks and balances while consolidating his own rule.

In 2005, he looked unassailable with a record majority in parliament based on the platform of cheap healthcare and handouts for rural voters that swept him to power four years earlier.

He formed the first elected government to serve a full term, after which it was re-elected. He was also the first leader in Thai history to form a one-party government.

But corruption scandals and alleged abuses of power eroded his popularity among Bangkok's middle classes. Simmering anger exploded in 2006 when his relatives sold off, tax-free, their $1.9 billion stake in Shin Corp, the telecoms empire he founded, to a Singapore state company.

Thaksin responded by calling an election three years early, which he duly won.

CONTROVERSIAL RISE

Born into a family of ethnic Chinese silk merchants in 1949 in the northern city of Chiang Mai, Thaksin became a policeman in 1973 before gaining a masters degree in criminal justice at Eastern Kentucky University.

He is still popular among rank-and-file policemen, accused by government backers of doing too little to stop the protests.

In 1987, he established a computer dealership with his wife that started selling hardware to the police. The company evolved into Shin Corp, a telecoms conglomerate with interests ranging from mobile phones to satellites, the Internet and the media.

But a corruption probe dogged him in power until he convinced investigators he made an "honest mistake" in failing to declare millions of dollars of shares transferred to his domestic staff.

A 2003 war on drugs in which 2,500 people were killed boosted his image as a crime-buster, but sparked outrage from rights groups, who said he was riding roughshod over civil liberties.

In February, Thailand's top court seized $1.4 billion of his assets, saying it was acquired through abuse of power.

(Editing by Michael Perry and Ron Popeski)