A demonstrator holds up a sign as she joins others during a protest against military rule at Victory Monument in Bangkok May 27, 2014. Thailand's military rulers settled down to work at their Bangkok headquarters on Tuesday, firmly in charge with royal endorsement while rounding up critics and searching for weapons they fear could still be used to fight their takeover. REUTERS/Athit Perawongmetha (THAILAND - Tags: POLITICS CIVIL UNREST MILITARY)
By Amy Sawitta Lefevre
BANGKOK (Reuters) - The heads of Thailand's powerful military agreed on Thursday to a weekend meeting with the leader of the movement seeking to overthrow Prime Minister Yingluck Shinawatra, deepening uncertainty about the country's immediate political future.
Yingluck has called a snap election for February 2, but that has done nothing to satisfy a protest group that wants an unelected leadership to run the country, aware that a nationwide vote would likely return another government controlled by the premier's divisive billionaire brother, Thaksin Shinawatra.
The armed forces issued a statement late on Thursday saying it had invited protest leader Suthep Thaugsuban to join the heads of the army, navy and air force at a seminar on Saturday "to find a way out for Thailand". The supreme commander would be the mediator and other "stakeholders" would join, it said, without elaborating.
The motives of Thailand's politicized, coup-prone military are unclear. It has sought to remain officially neutral but Suthep has tried to drag the generals into the conflict during daily televised speeches, asking them to take sides.
The protesters see Yingluck as a puppet of Thaksin, the tycoon who remains at the heart of Thai politics, despite being overthrown in a 2006 military coup and fleeing overseas to dodge a jail sentence for graft. They want the entire Shinawatra family to join him in exile, accusing them of corruption, crony capitalism and of using taxpayers' money to buy-off the rural poor with populist giveaways.
The military is being closely watched because of its tacit support over the past eight years for Thaksin's enemies in the royalist Bangkok establishment, who are threatened by his rise and the unassailable political mandate from millions of working class voters in every election since 2001.
Earlier on Thursday, deputy army spokesman Werachon Sukondhapatipak told Reuters the head of the armed forces had rejected Suthep's demand for a meeting the same day in what at first appeared as a crushing rebuff.
It is too soon to tell whether the military's decision to meet Suthep is a sign of its support, or an effort to present itself publicly as a mediator. After 80 years of democracy that have seen 18 coups or attempted coups, Thais have learned not to take the military's comments at face value.
It could be just what the silver-haired Suthep needs to reenergize his supporters. Their number on the streets has fallen from the 160,000 that surrounded Yingluck's office on Monday to just a few thousand since then.
Yingluck is refusing to resign, police have acted with restraint and government supporters have steered clear of rival demonstrators to prevent clashes they fear would give the generals a pretext to intervene and put Suthep's plan into action.
Suthep has offered little in the way of policy proposals.
His sometimes bewildering statements have included demanding Yingluck arrest for treason, an order to civil servants and security forces to report to him, not the government, and for citizen "peacekeeping forces" to take over from police.
Suthep sought to drum up support for his plans during a meeting with business leaders. He told them a parliament, or "people's assembly" of a maximum 400 members from a cross-section of society, none of them politicians, would be set up.
His protest movement, he said, would be allocated 100 of the seats and assembly members would be barred from taking political positions for five years upon completion of their duty.
He said he would play no part in the administration and would instead retire to his home province of Surat Thani.
"After I've completed my duties I'll go to sleep on Samui island and be done with politics," Suthep told supporters.
A small group of protesters briefly entered the premises of Government House on Thursday and protest leaders said they would cut water and power to the complex if police did not withdraw. Police held their positions and there was no confrontation.
A spokesman said protesters had fired slingshots at police the previous night. An officer on the premises said some crude explosives described as "ping pong bombs" were thrown into the grounds on Thursday. No one was hurt.
Moody's Investors Service, a rating agency, said in a note the crisis was negative for Thailand's sovereign rating.
"Prolonged protests will weigh on an already fragile growth outlook for 2014," it said. "Heightened political tensions have marred investor confidence."
Analysts say the economy would be hurt if multi-billion dollar infrastructure projects suffered further delays and tourists were scared off.
Yingluck said in a televised statement she would invite people from all walks of life to a meeting on December 15 to discuss "a peaceful way to reform the country", which could be further debated after the election.
Thaksin's supporters have said they would weigh in to defend Yingluck if Suthep appeared poised to overthrow her. Jatuporn Promphan, a leader of a pro-Thaksin group, promised to mobilize crowds that would dwarf the anti-government protests.
Thaksin's "red shirt" supporters brought central Bangkok to a halt in April and May 2010 in protests aimed at forcing then Prime Minister Abhisit Vejjajiva to call early elections.
That protest was put down by the military. More than 90 people, mostly Thaksin supporters, were killed over the period.
Abhisit and his former deputy Suthep have been accused of murder related to those events. A Bangkok court formally charged Abhisit with murder on Thursday and granted him bail.
The next hearing was set for March 24, 2014, but the case could drag on for months, or even years. Suthep did not turn up.
(Additional reporting by Aukkapon Niyomyat; Writing by Martin Petty; Editing by Nick Macfie)