They were chanting 'Get out, get out', 'Thaksin Out, Samak Out' as they pressed on with their four-week campaign to oust the government.

Nearly everyone in the crowd wore yellow shirts in honour of King Bhumibol Adulyadej; others wore yellow scarves and some had T-shirts saying 'We Fight for the King'.

They waved flags and sang songs outside the ornate wrought-iron fence surrounding Government House or sat on the road sipping tea, giving the area a carnival-like atmosphere.

Banners, which read 'Thailand Not For Sale' and 'We Love Thailand', were unfurled at the protest site. Other banners said the objective was to 'purge' the Thaksin regime, referring to the People Power Party (PPP) led by Mr Samak Sundaravej.

Some media reports estimated that the number of protesters at the People's Alliance for Democracy (PAD) march was as high as 50,000.

Several hours after the protesters sat in front of the barricades, the police suddenly turned around and walked away. Some officers even waved to the cheering crowd as they left.

'Police had to let the protesters through our blockades because we never wanted to use violence against them in the first place,' said police Major-General Surapol Thuanthong. He said some 8,000 policemen would remain in the area to ensure there was no unrest.

'We let them in because they promised not to use any weapons or go inside the Government House compound. They have kept their word so far,' he said.

PAD co-leader Chamlong Srimuang, a retired major-general who led a 1992 'people power' protest against a military-led government, said the protesters would defend themselves if government supporters attacked the marchers.

'We have some baseball bats because we don't believe the police can protect us from those troublemakers from hell,' Mr Chamlong told the crowd.

The absence of violence triggered a nearly 4 per cent rally in Thai shares while the baht, which hit more than a five-month low of 33.53 against the US dollar earlier in the day stabilised at 33.41.

It also prompted the PAD to claim victory as their rally continued into the evening.

'This is victory for PAD and the peaceful methods we have employed without any bloodshed or clashes,' Mr Suriyasai Katasila, its spokesman, said in a speech. 'This is a victory for the PAD and people who love justice.'

'Samak's government must resign because it has totally failed to solve economic problems, it has interfered in the legal process, has helped Thaksin's return to Thailand and tried to change the Constitution.'

Mr Sondhi Limthongkul, a leader of the PAD, told the jubilant crowd: 'We are here to fight for democracy, for Thailand. We are here to protect the motherland.'

REUTERS, AGENCE FRANCE-PRESSE