Prime Minister Abhisit Vejjajiva warned thousands of red shirted protesters on May 2 that there was a risk of further trouble if the protesters did not leave the Bangkok shopping district they have closed and barricaded themselves into for a month.

Mr Abhisit is under intense pressure to end the two-month stalemate that has choked off tourism, paralyzed Bangkok, shut down major department stores and stoked concerns over civil unrest. The finance minister said last week the protests could cut economic growth by two percentage points if they continue all year.

Thailand's financial markets, closed for a market holiday on May 3, have underperformed their regional peers since April 10 when the protest turned deadly, with a gun battle breaking out in the heart of old Bangkok that killed 25 people and wounded more than 800.

By early on May 3, thousands of the red-shirted supporters of ousted premier Thaksin Shinawatra remained in their 3sq-km fortified encampment, continuing to demand the dissolution of parliament and elections held within three months.

The mostly rural and urban poor red shirts say that Mr Abhisit lacks a popular mandate after coming to power in a controversial parliamentary vote 17 months ago to head up a coalition cobbled together with help from the military.

However, PM Abhisit has rejected a red shirt proposal for an election in three months, saying he would not negotiate in the face of threats. He has offered to call elections in December, a year early.