Bangkok: Former telecommunications tycoon Thaksin Shinawatra has lived in self-exile since 2008 to avoid a jail term for graft, but still commands the loyalty of legions of rural and urban poor and exerts a huge influence over politics, most recently through a government run by his sister, Yingluck Shinawatra.

Yingluck was forced to step down as premier by a court two weeks ago, but her caretaker government, buffeted by six months of protests against it, had remained nominally in power despite the declaration of martial law this week.

Thailand’s gross domestic product contracted 2.1 per cent in January-March from the previous three months, largely because of the unrest, adding to fears it is stumbling into recession.

The protesters want to rid the country of the influence of Thaksin, who they say is a corrupt crony capitalist who commandeered Thailand’s fragile democracy and used taxpayers’ money to buy votes with populist giveaways.

They wanted a “neutral” interim prime minister to oversee electoral reforms before any new vote.

They are being led by Suthep Thaugsuban, a former deputy prime minister who resigned from the opposition Democrat Party to lead the rallies.

The protesters say the Pheu Thai government has been buying votes with irresponsible spending pledges, aimed purely to bolster its support base, and thereby creating a flawed democracy.

The government and its supporters said a general election that it would likely win was the best way forward and it had proposed polls on August 3, to be followed by reforms.

Earlier on Thursday, antigovernment protest leader Suthep, a former deputy prime minister in a government run by the pro-establishment Democrat Party, told his supporters victory was imminent.

Twenty-eight people have been killed and 700 injured since this latest chapter in the power struggle between Thaksin and the royalist elite flared up late last year.