Analysts have said the former prime minister's arrival could give momentum to supporters over the border in Thailand, giving Thaksin a nearby base from which to organise his campaign to force new elections and return home.

Thaksin's arrival in Cambodia came a day after he stirred up fresh controversy in an interview with a British newspaper in which he was quoted as calling for the reform of the Thai monarchy.

Speaking to The Times, Thaksin spoke glowingly of the prospects for Thailand's Crown Prince Vajiralongkorn, once he succeeds his 81-year-old father, King Bhumibol Adulyadej, who has been in hospital for almost two months with a lung ailment.

Thaksin also offered repeated praise for the king, but said the circle of people around him had illegitimately interfered in politics.

"Thailand needs to have a monarchy but it should not be abused or played by the palace circles," he was quoted as saying.

'Misunderstanding'

Asked if the "royal institution" needed reform, he said: "Yes, yes."

Thailand's king has been in hospital for almost two months with a lung ailment [EPA]
Thaksin later said in a statement that the newspaper article had misrepresented his words, saying "the untrue report caused a misunderstanding among readers and Thais".
 
But Kasit Piromya, Thailand's foreign minister and former anti-Thaksin activist, along with other government officials, condemned the comments as violating the Thai monarchy.

Insulting or defaming the royal family is punishable by up to 15 years in jail in Thailand.

The Thai government has banned publication of the interview, with a spokesman for Abhisit Vejjajiva, the prime minister, warning journalists not to report the contents of the interview.

Kasit said the government would seek Thaksin's extradition over the matter, although the Cambodian government has rejected such a suggestion.

"We will not extradite him. We already clarified this case because he is a political victim," Cambodian foreign minstry spokesman Koy Kuong told reporters.

Relations soured

Thaksin's appointment as a Cambodian government advisor has aggravated relations between the neighbouring countries - already soured over competing claims to Preah Vihear, an 11th century temple, and its surrounding areas

Thaksin's "red-shirt" supporters continue to hold regular street protests [EPA]
Both countries have since recalled their ambassadors, and on Tuesday the Thai government announced it was cancelling an oil and gas exploration deal agreeed with Cambodia when Thaksin was prime minister.

Tight security was deployed for Thaksin's arrival in the Cambodian capital, with witnesses reporting armed troops lining the road into the city from the airport.

Thitinan Pongsudhirak, the director of the Institute of Security and International Studies at Chulalongkorn University in Thailand, told Al Jazeera that Thaksin was "on a new campaign to embarrass the Abhisit government" ahead of key regional meetings this week.

But he said Thaksin's comments on the Thai monarchy would "complicate his campaign to bring pressure to bear on the Thai government".
 
"The danger now for Thaksin is that he is next door but his opponents now will have a field day with what he said about the Thai monarchy.

"On the other hand, I think this government is falling right behind the lese majeste law and movement and it may not be so healthy for Thai society, not to be able to look to the future, not to be able to discuss certain issues out in the open," he told Al Jazeera.

Thitinan said that in such a situation of pent up emotions "it will not be healthy because it could lead to an explosion."

Exile

Thaksin has been in self-imposed exile since being ousted by the military in a 2006 coup. He returned to Thailand briefly last year but fled before being found guilty and sentenced to two years in jail for corruption.

Despite his exile, he remains at the centre of a bitter political fight between his supporters and those of the current government.

He is believed to travel frequently and spends much of his time in Dubai, but his appointment by Cambodia's government would give him a base closer to home from which to organise his campaign to force new elections and return home.

It is not clear how long Thaksin will remain in Cambodia, but he is scheduled to give a lecture on Thursday to 300 economists at the country's ministry of finance.

Khieu Kanharith, the Cambodian information minister and government spokesman, said Cambodia was "looking forward to learning from Thaksin's great economic experience and we are convinced that his experience will contribute to our country's economic development".