BANGKOK - THAILAND'S opposition insisted on Sunday it was headed for government on the eve of a vote for the new prime minister, despite a last-minute intervention by ousted leader Thaksin Shinawatra.

Billionaire Thaksin, toppled in a 2006 military coup, weighed in from exile late on Saturday, accusing the powerful army of interfering in the formation of a new government - a claim the military swiftly denied.

MPs will on Monday choose Thailand's third prime minister in four months, with opposition leader Abhisit Vejjajiva on the verge of the premiership after the pro-Thaksin government was brought down by a court order and hit by defections.

Mr Abhisit's Democrat Party and Thaksin's allies engaged in fierce last-minute lobbying to win over a handful of undecided MPs.

'The more (Thaksin) talks, it makes MPs feel uncomfortable. This is not about betrayal - it is about a decision for the nation,' Democrat Party secretary general Suthep Tuagsuban said on local television.

'I am confident that Abhisit will receive more than half of the parliamentarians' votes and can form the government.'

Mr Abhisit told reporters that he was 'ready to work immediately' to tackle the kingdom's economic woes, heightened by six months of crippling protests.

'If the Democrat Party has the chance to become the government, we will restore confidence within next two or three months,' he said.

Thaksin gave a pre-recorded video address at a Bangkok stadium to about 50,000 supporters late on Saturday.

'At the moment the army is interfering... Those people who interfere in forming the government must stop and withdraw,' he said.

Thaksin, who is living in an undisclosed foreign location to dodge graft charges, said the military was behind the defection of former ruling coalition lawmakers and four smaller parties who now back the British-born Abhisit.

Army spokesman Colonel Sunsern Kaewkumnerd on Sunday denied that the military had a hand in the political horse-trading, as parties jostle to fill the power vacuum left by the dissolution of the People Power Party (PPP).

'We are not interfering in politics,' he told AFP.

Police say they will have about 1,200 officers on duty outside parliament for the special session on Monday in case of protests by Thaksin supporters.

They say the army will be called in if there are any clashes.

The political manoeuvres follow six months of protests by the anti-Thaksin People's Alliance for Democracy (PAD), which peaked with a week-long blockade of Bangkok's airports beginning in late November.

The turmoil left 350,000 passengers stranded and has badly hit Thailand's economy, with GDP growth forecast at just two per cent next year.

The PAD ended the airport siege after a court on December 2 dissolved the PPP and handed a five-year political ban to then-premier Somchai Wongsawat, who is Thaksin's brother-in-law.

Thaksin's allies have regrouped in the newly formed Puea Thai (For Thais) party and insist that they can still form a government when MPs vote.

'The race will be very neck and neck - we will win by eight or ten votes,' said Chalerm Yoobamrung, a Puea Thai member who was health minister under the PPP-led government.

They have not officially named a prime ministerial candidate, although local media has speculated that they will nominate former police chief Pracha Promnog, head of the small Puea Pandin party.

Behind Thailand's political machinations lies a growing divide between Thaksin's supporters among the poor - especially in rural areas - and the country's Bangkok-based establishment, who back the Democrat Party.

Twice-elected Thaksin alienated elements in the palace, military and bureaucracy with his populist policies and was accused by the PAD of trying to damage Thailand's revered monarchy.

The PAD claimed the support of Queen Sirikit when she attended the funeral in October of a protester killed in a clash with police in Bangkok. It also accused the last government of being Thaksin's corrupt puppet administration. -- AFP

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