British-educated Sulak, 75, was taken from his Bangkok home late on Thursday and driven 450km to a police station in north-east Khon Kaen province to be charged with the offence in connection with a speech he made at a university last December, his lawyer said.

His comments were broadly critical of government spending on the lavish 2006 celebrations for King Bhumibol Adulyadej's Golden Jubilee.

After an hour of questioning, he was freed on bail and allowed to return to Bangkok, according to his lawyer.

The Welsh-educated scholar of Buddhism is no stranger to the lese majeste law, which could land him in jail for 15 years, although on the two previous occasions he has been charged - in the 1980s and 1990s - he was later acquitted.

Analysts say the arrest of the renowned academic is a blow to freedom of speech and makes debate of the country's political problems more difficult.

However, it is the timing of his arrest, amid a struggle between the royalist, military 'old guard', represented loosely by the People's Alliance for Democracy (PAD) street campaign, and forces loyal to former prime minister Thaksin Shinawatra, that has caused most concern.

Sulak is a vocal critic of Thaksin, who was ousted in a military coup in 2006.

Although Thailand's revered royals are officially above politics, claims to royal neutrality have been questioned since Queen Sirikit attended the funeral last month of a PAD protester killed in clashes with police, giving explicit royal backing to the campaign to oust the elected government which is perceived to be aligned to Thaksin.

'The more clear it becomes that the monarchy is caught up in politics, the more they are attempting to clamp down on local and international discussion of this role,' said Thailand researcher Andrew Walker of Australian National University in Canberra.

'It seems that the authorities are trying to keep a lid on discussion of this political role,' he said.

The PAD, a group of royalist businessmen, academics and activists, accuses Thaksin and his allies in the current administration of wanting to turn the kingdom into a republic - a charge they deny.

Under pressure from the protest movement, army chief Anupong Paochinda has urged the police and government to leave no stone unturned in rooting out critics of the royal family, triggering little short of a lese majeste witch-hunt.

Police have set up a task force to monitor websites which defame royalty and Internet service providers have been told to block offending webpages or face criminal action.

This year has seen a flurry of formal charges under the lese majeste law against people allegedly insulting the monarchy, including a Thai woman activist who made an allegedly inflammatory speech against the monarchy at a rally and Australian writer Harry Nicolaides.

Both are in jail with bail denied.

Lecturer David Streckfuss from the University of Wisconsin at Madison, who has studied the law, said he expected the number of lese majeste cases to rise as both pro- and anti-Thaksin camps try to appear more royalist than their rivals.

The long-term impact on the palace is only likely to be negative, Dr Streckfuss said, as it would make the monarchy 'more of a focal point' and 'put it under greater scrutiny by the people'.

REUTERS