Thai court disbands ruling party

Some 250,000 foreign tourists have been stranded by the sit-ins at Suvarnabhumi, a major Asian hub, and the domestic Don Muang terminal. It was not clear when flights would resume.

"We need time to check the safety and security systems," Serirat Prasutanond, acting head of Airports of Thailand, told Reuters. Before the PAD announced its withdrawal, he had said the airports would stay closed until Dec. 15.

The first cargo flight in a week left Suvarnabhumi on Tuesday, a welcome sight for a tourist- and export-dependent economy already suffering from the global financial crisis.

Finance Minister Suchart Thada-Thamrongvech told Reuters on Monday the economy might be flat next year, or grow by just 1-2 percent, after earlier growth forecasts of between 4-5 percent.

The travel chaos worried neighbours who were to attend a regional summit in Thailand in two weeks, prompting the government to postpone it until March 2009, a spokesman said.

The Thai baht edged up against the dollar and the stock market rose on optimism that political unrest might subside after the ruling, but shares soon fell back again.

Tom Byrne, sovereign regional credit officer for Asia and the Middle East at ratings agency Moody's, told Reuters it was "difficult to see an end to the destructive political polarisation in Thailand."

"We think the events of the past week will damage Thailand's near-term economic outlook and complicate policy making at a time when the government needs to respond coherently to the global recession," he said.

All six parties in the coalition government vowed to stick together and seek a parliamentary vote for a new prime minister on Dec. 8. Lawmakers who escaped the political ban would move to new "shell" parties to form another ruling coalition.

"The verdict comes as no surprise to all of us," said Jakrapob Penkair, a former minister and close ally of Thaksin.

"But our members are determined to move on and we will form a government again out of the majority that we believe we still have," he told Reuters. (Additional reporting by Bangkok bureau; Writing by Darren Schuettler; Editing by Mark Trevelyan)

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