Thousands of anti-government protesters have continued to occupy the grounds of the Thai prime minister's office as the threat of a public sector strike spreads 24 hours after a state of emergency was declared in the capital.

Samak Sundaravej, the Thai prime minister, declared the state of emergency for Bangkok on Tuesday, a week after tens of thousands of demonstrators led by the People's Alliance for Democracy (PAD) laid siege to his official compound.

But the military, given charge of restoring order, has yet to move on the protesters.

The emergency rule came after political tensions exploded into rioting and street fighting between Samak's supporters and opponents early this week, leaving at least one person dead and dozens more injured.

The protesters continue to demand Samak's resignation. But in a change of tack, they indicated on Wednesday that they would no longer demand his government quit as well.

Samak is accused of being a stooge to Thaksin Shinawatra, the prime minister ousted in a coup in 2006, and of running the government for him by proxy.

Tej Bunnag, the foreign minister, resigned on Wednesday but Samak has yet to accept his resignation, an aide said.
  
The aide, who refused to be named, told the AFP news agency that Tej had tendered his resignation because of his wife's ill health.
  
Somsak Kosaisuk, one of the protest leaders, said the protesters "will not hold talks with the government or anyone" until the prime minister steps down.

But there is no indication that Samak will resign.

The standoff has forced Samak to conduct official business from the city's military headquarters.

Tourism threatened

The growing unrest in the Thai capital is now threatening to cripple the country's vital tourism business as 12 countries have issued warnings for their citizens not to travel there.

The military has not moved on the protesters so far [EPA]

Public sector employees have also threatened to disrupt transportation services and cut off water and power supply to government offices.

On Wednesday the 200,000-strong State Enterprises Workers' Relations Confederation called for a strike to bolster street protesters' demands.

But Thai officials said on Wednesday that there were so far no reports of any disruption and that most employees had turned up for work and the services were running as usual.

Last week railway workers disrupted train services, with service suspended on nearly half of Thailand's lines over the weekend.

Samak also faces a legal challenge after the country's election commission recommended that his People's Power party (PPP) be disbanded for alleged electoral fraud committed during December's elections.

The commission on Tuesday forwarded its findings to the attorney-general's office to decide whether to submit the case to the constitutional court for a final ruling.

Samak and other party leaders would be banned from politics for five years if the ruling is upheld, although other members could form a new party and retain power by winning new elections.

Tuesday's move was reminiscent of the court dissolving of Thaksin's Thai Rak Thai party last year. The party later regrouped under the PPP flag.