If found guilty of electoral fraud, it would mean parliament would have to be dissolved, a new coalition will have to be formed, possibly with an opposition party, and a caretaker government set up by the PPP until new elections are called.
Al Jazeera's Step Vaessen, reporting from the Administrative Court in Bangkok, said the ruling was not, however, likely to break the deadlock between government opponents and supporters.
Anti-government protesters led by the People's Alliance for Democracy (PAD) continue to demand that the whole cabinet resigns and any moves by the ruling party to form a new shell party and select another from among its ranks to become prime minister would probably be met with more protests.
Meanwhile on Tuesday, a coalition of Thai business groups urged the ruling party to step down as a way of defusing the political crisis.
The Joint Standing Committee on Commerce, Industry and Banking also called on the PAD to end its "illegal" blockade of Bangkok's airports and said the government should call a snap election.
Hours before the court move, an anti-government protester was killed and 22 others were wounded in a bomb blast at Bangkok's besieged Don Muang airport.
|The PAD-led protesters say they will stay at the airport until Somchai resigns [AFP]
Local Thai television Channel 7 said a grenade was fired from a flyover near the domestic airport which has been occupied by the PAD since Thursday.
The yellow-shirted PAD supporters have been trying to force out Somchai Wongsawat, the prime minister, by accusing him of being a proxy for Thaksin Shinawatra, the premier ousted in a 2006 coup and the original target of the anti-government campaign.
Thaksin, who is Somchai's brother-in-law, is in exile after fleeing the country to escape corruption charges.
So far, six people have been killed and scores injured in bomb attacks, clashes with police and street battles between government opponents and supporters.
On Monday Somchai insisted that he will not leave office under pressure from the PAD.
"I will not quit and I will not dissolve parliament," he told reporters in the northern city of Chiang Mai, where he has been forced to govern from after being prevented from returning to Bangkok from a summit in Peru when protesters took over the city's two airports.
Al Jazeera's Step Vaessen reporting from the main international airport says Somchai will have to come down to the capital to attend to preparations for the Thai king's birthday celebration later this week, which is usually marked by a military parade.
Late on Monday the PAD supporters began leaving the protest camp at Government House which they had occupied since late August, to consolidate their control of the Bangkok airports.
Chamlong Srimuang, a protest leader, said they were moving out of the prime minister's office compound because it was becoming unsafe to stay in the compound, which has frequently come under grenade attacks by unidentified assailants.
A grenade attack early on Sunday at the protest camp wounded about 50 people, prompting PAD leaders to order the move to the two airports to reinforce their numbers there.
The PAD has so far allowed 37 empty aircraft to fly out of Bangkok's Suvarnabhumi international airport.
Al Jazeera's Step Vaessen, reporting from Thailand at a military base serving thousands of stranded travellers, said that extraordinary scenes of people trying to leave the country made it look like a natural disaster had struck Thailand.
More than 160,000 people have been stranded and the military base does not have enough check-in counters and the capacity to deal with all the luggage, our correspondent said.
The airport siege, coming in the wake of a global economic slump, is expected to severely hurt Thailand's $15bn tourism industry.
Thailand's tourism council says more than 300,000 travellers were stranded in the country, with 35,000 to 45,000 more being added each day the airports remained closed.