The transport minister, Pongsak Raktapongpisal, told Bangkok radio that Thaksin would head the meeting on Tuesday in order to "discuss new measures to stimulate the economy".

Thaksin had already resumed some of his duties on Monday, including trying to tackle the Muslim insurgency in the south of the country.

Rumours of full comeback were fuelled by a spokesman, Suraphong Suebwonglee, who said that Thaksin may ask the cabinet to revoke a resolution that appointed Chitchai Wannasathit as caretaker prime minister.

A return could prompt renewed street protests by Thaksin's critics. The previous protests led to a snap election on April 2 that was boycotted by the opposition, and prompted the prime minister to step down saying he was "taking a break from politics".

Political chaos has prevailed in Thailand since then. The elections have been declared unlawful and the king and supreme court have intervened in setting a date for a new election.

Guarded reaction

Thaksin said at the weekend that it was time he got back to work with no new election date yet set and in the country still in the hands of a caretaker government.

He told reporters gathered at his office: "Yes, I will have to work because there are several months before the election, otherwise the country will deteriorate."

Opposition political parties have not yet outlined how they would react to a comeback.

Thaksin's return could prompt a
repeat of street protests in March

Chuan Leekpai, a former prime minister and chief adviser to the opposition Democrat party, said: "Everyone is confused by Thaksin's action.

"He is playing with the country like a kid with a toy. One day he wants to be prime minister and the next he doesn't want to. I would like to warn Thaksin that the country is not a toy for him to play around with."

Suriyasai Katasila, a spokesman for the People's Alliance for Democracy that organised earlier protests, said more street demonstrations would be held, but only after celebrations next month marking the 60th anniversary on the throne of King Bhumibol Adulyadej.

Continued uncertainty

On Monday, the Election Commission proposed a further delay in plans for new elections until October 29, after Muslim officials said the earlier date, October 22, conflicted with the Islamic fasting month of Ramadan.

"I would like to warn Thaksin that the country is not a toy for him to play around with"

Chuan Leekpai, former prime minister

But neither date may hold since the commissioners are under pressure from the country's  courts as well as opposition political parties to step down over claims that they unfairly favour Thaksin's government.

Last month, the king urged the courts to end the political stalemate resulting from the election. The courts duly invalidated the balloting, won by Thaksin's Thai Rak Thai party.