The group of royalist academics and businessmen has vowed not to leave until the government - led by Somchai Wongsawat, the prime minister and Thaksin's brother-in-law - steps down.

The months-long stand-off erupted into bloodshed on October 7 when police fired tear gas at the demonstrators, sparking clashes that left two people dead and nearly 500 injured.

A number of small blasts have rocked the protest camp in recent weeks, injuring several people.

Thaksin to 'fight back'

And the political turmoil looks set to increase amid signs that Thaksin – who has mostly been living abroad in exile since he was removed – appears ready to announce his return to active politics at a rally in Bangkok next month.

A Thaksin ally says he will soon "return to politics to defend his name" [Reuters]
The former prime minister was sentenced in absentia to two years in jail over a land deal by the Supreme Court in October and recently had his visa to Britain - where he has spent most of his exile – revoked.

Now he appears set to tell supporters by phone that he will come back fighting.

Jatuporn Promphan, a legislator from the ruling pro-Thaksin People Power party (PPP), was quoted by Thai daily The Nation on Wednesday as saying that "Thaksin will no longer wait to be attacked, he will fight back by all means".

"Thaksin now believes that the only way for him to survive...is to fight for his name. [He] will announce...that he will return to politics to defend his name," he said.

Jatuporn also indicated that Thaksin's divorce from his wife Pojaman last week was a tactical move to give him more room for political manoeuvre.

"Thaksin and his wife had decided earlier, after the coup d'etat in 2006, that they would separate if he decided to return to politics. It's a promise between them," Jatuporn said.