Thai authorities struggle to end mass street protest

Protesters targeted Thailand's elections watchdog today, at one point storming its office, while ignoring orders to leave Bangkok's main shopping district for a third day in an increasing bold rally to force elections.

The protesters in the election office later dispersed, but tens of thousands of the red-shirted demonstrators, supporters of ousted Prime Minister Thaksin Shinawatra, remained encamped in a district of luxury hotels and department stores.

Thousands of others moved out across the city on trucks, waving red flags and shouting through bullhorns demands for fresh elections, which Thaksin's allies would be well placed to win.

Thai stocks, which have climbed 81 percent over the past 12 months, ended up 1 percent after sliding earlier on concerns over the prolonged protest. The baht currency eased about 0.2 percent, less than some had expected.

"The red shirts have taken the pressure up another notch," said Tim Condon, chief Asia economist at investment bank ING.

"But I interpret the reaction in the foreign exchange market and the stock market as evidence that, despite the political noise, negotiations are taking place among key interest groups that are helping resolve political transmission issues, which is investor-friendly."

Most analysts doubt authorities will remove the "red shirts" by force - a politically risky decision for Prime Minister Abhisit Vejjajiv as his 16-month-old government struggles to build electoral support outside Bangkok.

Being seen as a catalyst for violence in what has been a largely peaceful rally could harden opposition against Abhisit in the vote-rich north and northeast, a Thaksin stronghold home to just over half of Thailand's 67 million people.

"He may be facing pressure to break up the rally but he doesn't want that. He knows the use of force and strong measures would be a mistake at this stage," said Nakharin Mektraira, a political scientist at Thammasat University.

But pressure is growing on the British-born, Oxford-educated Abhisit, who was widely seen surviving the showdown unscathed when the rolling street rallies started on 14 March as up to 150,000 massed in Bangkok's old quarter.

Instead of fizzling out, as many expected, the protests are growing more confrontational and more disruptive to life in politically powerful Bangkok, whose middle and upper classes wield tremendous power in Abhisit's Democrat Party.

The "red shirts" say Abhisit has no popular mandate and came to power illegitimately, heading a coalition with tacit military support after courts dissolved a pro-Thaksin party that led the previous government. Abhisit says he was voted into office by the same parliament that picked his Thaksin-allied predecessors.

While he remains backed by the military and establishment elite, some members of Abhisit's own party say he needs to take a more proactive role in handling the protest and defusing tension. Others say he needs to make further concessions.

Abhisit has already offered to dissolve parliament in December, a year early. Some say the protesters are holding out for a better offer such as dissolution in three to six months.

"I fear the tide may turn against us if we do not go on an offensive at some point to restore order," one cabinet member said on condition of anonymity. "But it's a delicate situation."

The "red shirts" accused the Election Commission of stalling in an investigation of alleged irregularities by Abhisit's Democrat Party and set a deadline on Monday for the Election Commissioner to answer their questions in person after thousands of protesters gathered outside the building.

When he failed to show, hundreds swarmed into a ground-floor hallway but were blocked by police and repelled into compound grounds. They eventually left after police gave assurances the Election Commission would hear the case on April 20.

The storming of the building came hours after the protesters threatened to expand their increasingly confrontational rally, which Bank of Thailand Governor Tarisa Watanagase said could hurt the economy if it continues.

Despite warnings they could face a year in jail, the protesters have said they had no plans to leave the downtown area. Many tore up fliers ordering them to vacate.

The government filed a court order on Monday to remove the crowd and planned to file another to arrest leaders of the rally, which the government says violates Thailand's tough Internal Security Act.

But the protesters remained defiant.

"We won't leave. We sent our lawyer to the court and will submit an objection immediately if the court issues any order to force us to leave," said Nattawut Saikua, a protest leader.

Central World, the second-largest shopping complex in Southeast Asia, and half a dozen other big malls stayed shut for a third day. Central World usually attracts 150,000 people a day and generates 45 percent of the earnings of its parent, Central Pattana Pcl, Thailand's top department store operator.

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