Thai PM says willing to negotiate with Thaksin

BANGKOK, Jun 16 (Reuters) Thai Prime Minister Surayud Chulanont said today he was ready to negotiate with his ousted predecessor, Thaksin Shinawatra, to defuse growing political tensions in the country.

Surayud made the offer a day after Thaksin attacked the generals who removed him in a military coup last September, saying he was ''ready to come back to fight for his good name''.

''I'm ready to negotiate on every issue where we have problems,'' Surayud said in his weekly radio and television address.

''I have been ready for nine months. If we can negotiate, it would be of the utmost benefit. But we haven't done it,'' he said, noting he had only spoken on the telephone twice with Thaksin since the coup.

Yesterday, in a speech recorded in exile and played on giant television screens to 13,000 of his supporters in central Bangkok, Thaksin accused the coup leaders of destroying the country's reputation and economy.

''These dictators are taking the country back several decades,'' he said to cheers from the crowd, many of whom waved red and white flags saying ''CNS get out'' -- a reference to the Council of National Security, as the coup leaders are called.

''They have abused the rule of law and have undermined the country's credibility,'' said the former telecoms tycoon, who won unprecedented election landslides in 2001 and 2005 on the back of huge support from the rural masses.

''If we continue to let the country fall into disarray, the poor will get poorer and businessmen will also suffer.'' Spome 2,000 pro-Thaksin and anti-coup activists gathered at the Sanam Luang parade ground today and more were expected for a rally to demand an immediate return to democracy.

GROWING RALLIES Surayud, who has promised a general election in December, said his government was prepared to take emergency measures if the protests, which have been peaceful so far, turned violent.

Hundreds of police and soldiers were on duty in the area next to Bangkok's glittering Grand Palace.

''As long as you do not break laws, destroy public property or intrude on government offices, these kind of activities are a normal political gathering,'' Surayud said of the rallies.

Tensions had built up after the army-appointed Asset Examination Committee (AEC) froze 1.5 billion dollars of Thaksin's assets, which Surayud said would be among the key issues to be negotiated.

But, he added, that would depend on when Thaksin, who is living in London, planned to return to Thailand.

After the asset freeze, Surayud said for the first time that Thaksin was free to come back to defend his name. But army chief and coup leader Sonthi Boonyaratglin later suggested Thaksin could be assassinated if he returned.

Since the putsch -- Thailand's 18th in 75 years of on-off democracy -- the interim government has come under fire for many of its economic decisions, including capital controls to rein in the baht and rewriting foreign investment laws.

Consumer confidence has fallen for the last seven months, and economic growth forecasts have been trimmed as the political turmoil has deepened.

At face value, the coup stemmed from middle-class street protests in 2006 against Thaksin's autocratic style and huge personal wealth, which his opponents say he wielded unfairly to secure unassailable support from rural voters.

But analysts say it was as much about a royalist military and corporate elite removing a nouveau riche, ethnic Chinese businessman who had encroached too far on their traditional turf.

REUTERS HK HT1820