BANGKOK Prime Minister Abhisit Vejjajiva said there would be a public holiday in Thailand on Friday to help the government cope with the effects of political protests that have caused chaos in Bangkok and threaten an Asian summit.
In a televised address to the nation late on Thursday, Abhisit also said he would not give in to demands to step down made by thousands of red-shirted supporters of ex-premier Thaksin Shinawatra, who was ousted in a military coup in 2006.
"I believe dissolving parliament under current circumstances is highly inappropriate as it is unlikely to lead to an election that helps promote a democratic image," he said.
Banks and the stock exchange are expected to open as normal.
Thaksin now lives in self-imposed exile but his absence has not healed the divisions between the royalist, military and business elite, who say he was corrupt, and the poor who benefited from his populist policies.
His supporters in the United Front for Democracy against Dictatorship (UDD) say Abhisit, elected by parliament in December, is a pawn of the influential army and called a mass rally in Bangkok this week in a bid to force new elections.
They are also threatening to disrupt an Asian summit meeting that starts in the resort town of Pattaya, 150 km (90 miles) south of Bangkok, on Friday.
The UDD said it would block access to the hotel where the summit will be held, bringing together 16 Asian leaders.
"We apologize to partners of Thailand, but we need to show them that the Thai people do not accept this government," Jatuporn Prompan, a UDD leader, told a news conference.
As many as 100,000 Thaksin supporters had assembled on Wednesday in a sea of red in the area around Abhisit's office, Government House. On Thursday the numbers were put by witnesses at around 30,000 but other flashpoints were appearing.
"The government has learned that the aim of the remaining protesters is to try to provoke confrontation and violence, and to mobilize people to participate in rioting," Abhisit said.
Taxi drivers, a group that has supported Thaksin in the past, blocked major junctions in central Bangkok, including Victory Monument, traffic police said.
"If the government uses force to disperse our rally at Victory Monument, I believe red shirts will be all over every city hall. The country's administrative arms will be paralyzed," Jatuporn said from a makeshift stage at Government House.
PEACEFUL SO FAR
The Thai bourse is getting concerned. It ended flat on Thursday, when many other Asian markets extended a recent tentative rally that has eluded Bangkok. An attempt to move higher faded after news of the traffic blockade spread.
Business leaders worry about the effects of political turmoil on the economy, already heading into recession after a slump in exports. Data on Thursday showed consumer confidence fell for a second month in March, with political uncertainty a factor.
The protests have been largely peaceful so far, and Abhisit has said the gatherings could continue if they stayed that way. But the UDD said it would step up its protests if Abhisit refused to quit.
"We've tried the soft approach. We've given them many chances already. Now we will show them what we are capable of," UDD leader Adisorn Piangkate told the crowd outside Government House.
Abhisit said the protests posed no security risk to the summit, brushing aside an incident on Tuesday when his car was attacked after he left a cabinet meeting at the same venue.
Foreign ministry spokesman Tharit Charungvat told Reuters in Pattaya that security was in place and contingencies drawn up.
"We want to solve these problems without any confrontation. The prime minister has stressed the situation is under control and we have nothing to worry about," he said.
The summit had to be canceled late last year because of political unrest when a pro-Thaksin government was in power. Abhisit's administration has billed the rescheduled event as a sign Thailand was getting back to normal.
Abhisit has refused to use force to disperse the protesters. In that, he has learnt a lesson from history, said Economics Professor Lae Dilokvidhyarat from Chulalongkorn University.
"History since the 1970s has showed that every civil strife or coup in this country was triggered or stemmed from the government, police or soldiers starting a crackdown," he said.
"As long as this government can restrain itself in the face of provocations, and can control police and soldiers, I think we won't see riots or widespread street fighting."
(Additional reporting by Arada Therdthammakun and Kittipong Soonprasert; Writing by Alan Raybould; Editing by Paul Tait)