Thailand sets date for crucial election

BANGKOK (Reuters) - Thailand is to hold a general election on July 3 in what is expected to be a close contest that could reignite a violent political conflict that has dogged the country for five years.

Parliament will be dissolved on Tuesday following endorsement by King Bhumibol Adulyadej, the government said on Monday.

Prime Minister Abhisit Vejjajiva is expected to officially announce the decision at 8.30 p.m. (0130 GMT) on national television.

The stakes are higher than at any time since a 2006 bloodless coup removed former Prime Minister Thaksin Shinawatra and plunged Thailand into a crisis broadly pitting the rural and urban poor supporters of Thaksin against the establishment elite.

"Results will be hard to predict this time," said Siripan Noksuan, a political scientist at Chulalongkorn University.

"Most surveys are predicting close polls and the lack of a clear decisive win is making everybody uneasy. The end of the crisis is difficult to foresee."

The poll will be Abhisit's first test of popular support since his coalition government came to power in late 2008 in a parliamentary vote the opposition said was arranged in the army barracks. A court dissolved the previous pro-Thaksin ruling party for electoral fraud, which coincided with an eight-day blockade of Bangkok's main airports by an anti-Thaksin group.

The election may be an opportunity to heal political divisions but some fear it could also push Thailand back to the brink of chaos following violent anti-government protests last year in which 91 people died.

The pro-Thaksin "red shirts" who battled the military in central Bangkok in April and May last year have said they would respect the results of the poll as long as there was no blatant, heavy-handed intervention by "unelected powers".

CLOSE RACE

The voting is expected to be very close. Abhisit's Democrat Party has not won an election in two decades, but analysts said the odds are in its favor because of new electoral rules and disarray inside the opposition Puea Thai party, which still needs to settle on a new leader and line up candidates.

Thailand's economy, Southeast Asia's second largest, is performing strongly and Abhisit has rolled out a raft of populist economic policies and subsidies targeting the poor, the vast majority of voters.

But the pro-Thaksin Puea Thai remains popular in the vote-rich north and northeast, strengthened by a sense of alienation and resentment among the red shirts, particularly after the violent end to the protest last year.

In a recent survey of 2,143 eligible voters by Assumption University, 36.4 percent of respondents said they would vote for Puea Thai and 34.1 percent for Abhisit's Democrats.

Puea Thai had better scores than the Democrats on almost all categories, including policies, vision and administrative efficiency. The Democrats led in just one, "integrity and transparency".

Near-daily rumors about a coup in a country that has seen 18 military takeovers or attempted putsches since 1932 highlights the uncertainty and risks surrounding the poll.

Analysts said the current government's royalist and military backers are unlikely to give way quietly if Puea Thai wins, possibly using judicial intervention or a coup to restore the status quo.

That could in turn lead to a new and stronger wave of anti-government street protests.

(Writing by Ambika Ahuja; Editing by Martin Petty)