Bangkok: Persisting anti-government protests and political instability threaten peace and democracy in Thailand and could usher in another military coup, a leading think tank has said.

The warning came as Thailand’s new Prime Minister Somchai Wongsawat put the finishing touches on Tuesday to his cabinet line-up, which is expected to be unveiled within days.

Protesters besieging the main government compound will be watching closely for signs of the influence of ousted premier Thaksin Shinawatra, as they continue their campaign to bring down any government with links to him.

“Every day the standoff continues, political divisions become more intractable -- and another coup becomes more likely,” Brussels-based International Crisis Group (ICG) said in a statement released late on Monday.

Thaksin was overthrown in a coup in September 2006 and fled into exile for a second time in August this year as corruption cases mounted against him.

His allies in the People Power Party (PPP) won elections in December 2007 but have struggled with protests and court cases against them.

“Overthrowing the elected government - either by a coup or by street demonstrations - would be a severe blow to Thailand’s democracy”, said Rungrawee Chalermsripinyorat, ICG’s Thailand analyst.

The group said the crisis was affecting tourism and the economy. The Thai stock market has fallen more than 25% since an alliance of anti-government demonstrators launched their campaign in late May.

Tensions grew when they stormed Government House nearly a month ago.

PPP deputy leader Somchai was elected premier on 17 September, a week after his predecessor Samak Sundaravej was forced from office after a court ruled that he had taken illegal payments for hosting TV cooking shows.