However, he denied that the government had any plans to impose martial law, despite growing demands from some Thais that he take firmer steps to bring an end to the crisis.

"So far, from what we have discussed, we (the government and the army) think that the situation doesn't warrant martial law,'' Abhisit said.

Abhisit's comments came ahead of an emergency meeting of his cabinet to discuss the eight-week standoff with the so-called "red shirt" protesters.

in depth

  Q&A: Thaksin and the red shirts
  Profile: Thaksin Shinawatra
  Blog: Thailand's darkest day
   
  VIDEOS
  Deadly grenade attacks
  Red shirts rally rural support
  Protesters fight for a voice
  Violence flares in capital
  Red shirts stage blood protest
   
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  Thailand: Warring colours
  101 East: Thailand's red shirts

The prime minister has called off talks with the protesters, but has said he still hopes a political solution will persuade the red shirts to end their blockades.

As Sunday's cabinet meeting began however, red shirt leaders reiterated that they would not abandon their protest camp in central Bangkok.

The red shirts have said in any case that they would ignore a declaration of martial law if the prime minister decided to go down that route.

"Even if they announce that, we are not going to go home, we are going to stay put," said Nattawut Saikua, a red shirt leader.

The protests, and occasionally violent clashes with security forces, have developed into Thailand's worst political crisis in decades threatening lasting damage to Southeast Asia's second largest economy and badly denting the country's vital tourism industry.

It has also prompted warnings from the International Crisis Group, a conflict resolution body, that the showdown could deteriorate into an "undeclared civil war".

On Saturday, Sansern Kaewkamnerd, an army spokesman told reporters that the government had ordered police to regain an area around Chulalongkorn Hospital, near Bangkok's Silom business district, using force if necessary.

It comes after about 200 red shirts stormed into the hospital grounds on Thursday, looking for soldiers they thought were preparing an attack.

Occupied

"Tomorrow the police chief has to continue clearing the area by all means, from talks to the use of force if necessary," Sansern said.

The red shirt protests have paralysed large areas of Bangkok [Reuters]

"We believe the police can handle this. If we have to use force, it does not mean that we want to disperse protesters at Rachaprasong junction, but we just want the hospital area back."

The junction is a shopping area that the red-shirts have occupied since April 3 as part of their campaign to force early elections, building a three square-km fortified encampment, which has become a tented city within a city.

The protest rally is now in its eighth week and the authorities have found no way to disperse it without the risk of violence.

Some evenings have seen tens of thousands of protesters gather in the occupied shopping district.

One failed attempt by security forces to dislodge the red shirts from a different part of Bangkok on April 10 ended with 25 people dead and more than 800 wounded.

Another person died in still-unexplained grenade attacks in the Silom business district on April 22 and a soldier was killed in skirmishes on a suburban highway on April 28.

The red shirts consist mainly of poor, rural supporters of former prime minister Thaksin Shinawatra along with pro-democracy activists who opposed the military coup that ousted him in 2006.

They believe that the current Thai government, led by Abhisit, is illegitimate having come to power in late 2008 in a parliamentary vote after a court ruling dissolved the previous pro-Thaksin government.