Thai troops patrol Bangkok after clashes

BANGKOK (Reuters) - Thailand's military put troops on the streets of Bangkok on Tuesday to keep order after a day of battles between police and anti-government protesters in which more than 380 people were injured.

One man was killed by a car bomb near parliament, police said, where protesters involved in a four-month campaign to unseat the government battled riot police in clouds of teargas.

Army commander Anupong Paochinda said police asked for help and he denied rumors of a coup, two years after the military ousted Prime Minister Thaksin Shinawatra in a bloodless putsch.

"People should not panic. Soldiers will not launch a coup since it will not be good for the country," he told reporters.

The clashes began after dawn when police cleared a path through 5,000 members of the People's Alliance for Democracy (PAD) besieging parliament since Monday in a bid to bar cabinet ministers from the opening session.

By evening, 381 people had been treated for gas and other injuries, 48 of them seriously hurt, after the worst street violence since clashes between the army and pro-democracy activists in 1992.

Local media said two policemen were shot and another stabbed.

One protester lost a foot and another had his leg severed by exploding gas canisters, prompting Deputy Prime Minister Chavalit Yongchaiyudh to take responsibility and quit.

He said he had asked police to exercise restraint.

"Since this action did not achieve what I planned, I want to show my responsibility for this operation," Chavalit said in his resignation letter.

As soldiers moved into the streets, the PAD, an extra-parliamentary coalition of businessmen, academics and activists, began pulling back to the Government House compound it has occupied since late August.

The group accuses new Prime Minister Somchai Wongsawat of being a puppet for Thaksin, his brother-in-law, and vowed to keep campaigning until he dissolved parliament.

The PAD argues Thai democracy has been undermined by billionaire Thaksin and his allies, who easily won the last three elections, and has called for "new politics" that would include a proportion of appointed MPs.

"Overthrow the Thaksin regime. Together we win or lose. We will know it today. We won't give up," PAD leader Anchalee Paireerak said.

CRISIS DEEPENS

Despite cutting power to the building, the PAD failed to stop Somchai's speech to parliament. He called for national reconciliation to end a three-year crisis pitting Thaksin and his rural base against the royalist and military establishment believed to be backing the PAD.

"This government is determined to tackle economic problems and to listen to all sides to find a solution to end the crisis," Somchai said.

He slipped out through a back gate to a waiting helicopter, which whisked him out of the parliament grounds.

The unrest has hurt investor confidence and distracted policymakers when they should be focused on slowing economic growth and fallout from the global credit crisis, analysts say.

Citing the protests, traders said the baht fell against the dollar and the stock market tumbled, although in both cases the credit crisis was also a major factor.

The baht was at 34.51 per dollar, down from 34.38 on Monday. The stock market fell 4.2 percent to a five-year low, failing to get a lift like other bourses from a big Australian rate cut.

Similar street violence last month triggered a two-week state of emergency in Bangkok, but the army refused to enforce it and the measure was withdrawn after it scared away tourists.

Somchai said he was not considering another decree.

He has sought a dialogue with the PAD but there seems little prospect of the movement leaving the prime minister's offices, forcing Somchai to run the country from a little-used airport.

The PAD's main draw card has been defense of the throne and 80-year-old King Bhumibol Adulyadej, regarded as semi-divine by many Thais, in the face of what they say is a bid by the Thaksin camp to turn the country into a republic, a charge he denies.

($1=34.41 baht)

(Additional reporting by Nopporn Wong-Anan, Ed Cropley and Adrees Latif; Writing by Darren Schuettler; Editing by Alan Raybould and Sanjeev Miglani)