* PM Hun Sen offers election in 2018, five months early
* Opposition campaign falters after deadly crackdown
* Government still faces labour unrest, discontent among young voters
By Prak Chan Thul
PHNOM PENH, June 12 Riot police with assault rifles stand guard near high metal walls. Lines of parked trucks and coiled razor wire mark the perimeter of a site in Cambodia's capital that's strictly off limits to the public.
What appears at first like a fortified military base is symbolic of the struggle facing Cambodians riled by incessant land grabs, official corruption and labour disputes in a country tightly controlled by one man for nearly three decades.
The venue under guard is Freedom Park, the only place in Cambodia where anti-government protests are allowed. At least they used to be - until an opposition-led movement to topple Prime Minister Hun Sen gathered steam, and the authorities closed it indefinitely.
"They created Freedom Park so people could express their opinions, but now they've shut it down, so what does this mean?" said Chhairith Chhom, 32, a supporter of the opposition Cambodia National Rescue Party (CNRP).
It means the chance of the CNRP rebuilding its once formidable campaign of rallies calling for an annulment and re-run of last year's election, which it says was rigged to favour the ruling Cambodian People's Party (CPP), is extremely slim.
After decades in control through party and business networks and with influence over the judiciary and media, the CPP and Hun Sen were stunned by the once feeble opposition's electoral challenge last July, when it carved off a chunk of their parliamentary majority, according to results the CNRP disputes.
The CNRP won the votes of Cambodians yearning for change and tired of the CPP's monopoly of power. It also won over unions representing half a million textiles workers who complain of paltry earnings and resent a government that's allowed only marginal pay rises.
From September last year, the CNRP led some of the biggest protests ever in Cambodia, but they fizzled out after a crackdown on factory strikes in January that killed at least four people and alarmed major clothing brands with interests in Cambodia, like Adidas, Nike and Gap.
Since then, anti-government protests intended to draw hundreds of thousands of people attracted just a few hundred. Freedom Park was shut down in April, denying the opposition a haven and lawful staging ground to renew their offensive.
"In general, people I've seen and talked to in villages, just want change of national leadership," said Kem Ley, an independent political analyst.
"But what the CNRP has been doing is the same thing, again and again," Ley said, referring to the calls for protests. "People are just tired and afraid because of the government's shameless use of violence."
The CNRP has been forced to scale back its demands after months of fruitless negotiations and failed attempts to win international support.
On Tuesday, Hun Sen made concessions that are likely to deflate even further the faltering opposition campaign.
In the longer run, Hun Sen, 61, might have to contend with brooding unions and social-media-savvy younger voters hankering for change but for now, it looks as if the former Khmer Rouge guerrilla and self-styled "strongman" of Cambodian politics, will rule comfortably until the next election.
The concessions included a television broadcast license for the CNRP, a promise of reform of a politicized election commission, and the next polls in February 2018, five months earlier than scheduled and much later than CNRP's softened demand for a new poll in 2016.
The CNRP appears to have little choice but to accept what is on the table and end an almost year-long parliamentary boycott that experts warn is playing into the CPP's hands and risks making the opposition party irrelevant.
"It's positive," said Nhem Ponhearith, CNRP spokesman, referring to Hun Sen's offer. "These go along with what the CNRP has been demanding."
Hun Sen also derided the CNRP, accusing it of starting a rumour at the weekend that he had died of a stroke. He said Cambodia needed him and the opposition was no threat.
"Don't pray for Hun Sen to die, they need Hun Sen to control the situation," he said, with his customary reference to himself in the third person.
"My biggest problem is nothing, only whether our people are all right and have water for their farms."
But his problems, at least in the longer-term, are perhaps bigger than he is letting on.
Workers are still demanding a sharp rise in the $100 monthly minimum wage and could at any time hold hostage the $5.3 billion garment sector, Cambodia's biggest employer and economic driver, which suffered reduced orders and a 17 percent drop in first-quarter exports from political and labour unrest.
Some analysts say the CNRP's challenge was not fruitless because it sent Hun Sen a message that Cambodia's population, 70 percent of whom were born after the 1970s and 1980s years of war, is no longer willing to put up with venal, authoritarian rule in the name of peace.
"Hun Sen understands it, the CPP understands it, that there's no way Hun Sen can go back to the old days of the strongman," said political analyst Ou Virak.
"Times are changing. There's a younger population that's demanding more than the old generation, which pretty much wanted peace and nothing else." (Editing by Martin Petty and Robert Birsel)