But he said high on the meeting's agenda was "poverty", although cabinet allotted money for dealing with the protests - now entering their eighth week.

"We want to solve the problem of poverty and when the prime  minister is ready, he will announce the political guidelines to  solve the problem of the rallies," Panitan said.

No 'tough talk'
  
At least 27 people have been killed and nearly 1,000 injured since the protests began in mid-March.

The red shirts continue to occupy parts of Bangkok in a bid to force snap elections.

Al Jazeera's Wayne Hay, reporting from Bangkok, said there was no "tough talk" about clearing the red shirts after the cabinet meeting.

"No firm answers [are] coming out of that cabinet meeting [on] a way forward, a way to end this long-running protest," he said.

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
   
  PROGRAMMES
  Thailand: Warring colours
  101 East: Thailand's red shirts

"The only thing that came out of that meeting is an approval of the budget to help those who have been affected [by the protests] and also a funding boost for police as they continue to tackle this situation."

Earlier, the prime minister said the government had no plans of imposing 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.

He 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.

"Even if they announce that, we are not going to go home, we are going to stay put," Nattawut Saikua, one lred shirt eader, said.

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".

Police action approved

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

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

"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, building a 3sq km fortified encampment, which has become a tented city within a city.

On some evenings, tens of thousands of protesters gather in the occupied shopping district.

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

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