Exile rumours swirl around former Thai PM Thaksin

BANGKOK, Aug 11 (Reuters) - Speculation about a possible return to exile by ousted PM Thaksin Shinawatra reached fever pitch in Thailand on Monday as he and his wife failed to return from an overseas trip for a court hearing.

Lawyers for Thaksin, who remains a powerful force behind the current government, said they had no idea where their client was, after two airline industry sources told Reuters Thaksin had never boarded a plane on Sunday night from Beijing, as he had planned. "As of now, nobody in the lawyer team knows where he is," lawyer Kamnuan Chalopatham told Reuters. "We should have some progress before noon."

A pro-Thaksin MP also told reporters at the airport on Sunday night that Thaksin, facing a slew of corruption cases lodged since his removal in a 2006 coup, was not coming home, and suggested he had flown to London.

If true, Thaksin's decision to flee rather than fight a string of highly divisive corruption trials could mean the beginning of the end of the political turmoil that has dogged Thailand's government and markets for the last three years.

The stock market is expected to rise amid hopes Thaksin's removal from the political scene would lower the chances of street clashes or worse between his supporters and opponents.

Thaksin owns UK football club Manchester City, has a property in London and at least one of his adult children is studying there.

Kamnuan said Thaksin and his wife Potjaman, who was sentenced to three years in jail last month for tax fraud, had until 0930 GMT to report to the Supreme Court. He also said the team of Thaksin lawyers was working on a statement to the court. (Reporting by Panarat Thepgumpanat; Writing by Nopporn Wong-Anan; Editing by Ed Cropley and Jerry Norton)