Thailand plans to hold a national referendum to end a political crisis over a street campaign against the government, embattled Prime Minister Samak Sundaravej said yesterday after rejecting calls to quit.

The anti-government group that has led the three-month-long protest against Samak in Bangkok immediately rejected the plan, signaling that political uncertainty would continue to beset the Southeast Asian kingdom.

Samak, desperately searching for a way to end the crisis that has paralyzed his government, said in a radio broadcast that he would urge the Senate to pass a pending referendum law quickly.

?The campaign will last for a month in which both sides can do whatever electioneering they want,? he said, adding that the thousands of activists who have barricaded themselves within his official compound could stay there during this period.

The anti-government People?s Alliance for Democracy (PAD), a mainly middle class grouping of royalists and businessmen whose activists took over the prime minister?s compound in Bangkok 10 days ago, called the plan a delaying tactic.

Financial uncertainty

?The referendum will not solve anything. It is the government?s delaying tactic to prolong its survival,? said PAD spokesman Parnthep Pourpongpan.

?As long as he insists on staying on, we will not go anywhere. It doesn?t matter how many days or years, or even into the next life,? PAD leader Sondhi Limthongkul told supporters.

Thailand?s five-year CDS ? insurance-like contracts that protect against default ? widened by 4 basis points (bps) to 144 bps yesterday and the contract is now some 25-30 basis points wider than when political problems began. The crisis has taken a toll on Thai stocks and the baht, already buffeted by inflation and a global economic slowdown.

Cabinet spokesman Wichianchot Sukchotrat said government lawyers would decide what questions should be put to Thailand?s 63 million people.

One minister said the referendum could take the form of a national vote of confidence, which analysts said Samak?s government was certain to win on the back of its solid support among poorer Thais in the countryside.

The PAD accuses Samak of being an illegal proxy for former premier Thaksin Shinawatra, ousted in a 2006 coup and now in exile in London. Thaksin is widely admired by the poor and in the countryside but despised by Bangkok?s middle class.

Economist Sin Beng Ong at JPMorgan said the philosophical difference between the PAD and the government meant there was unlikely to be any resolution to the crisis soon. Samak, 73, said in his morning broadcast that it was time for Thais to choose sides. ?I want to avoid bloodshed. I want to avoid a crisis,? he said, calling the PAD a lawless mob. ?The rest of the country must decide if they will join them.?

Samak declared emergency rule after clashes between his supporters and anti-government protesters killed one man and injured 45, but the army has refused to use force to evict the protesters, saying it would only make the situation worse.

Another possibility is revered King Bhumibol Adulyadej intervening in the crisis. Such a move would be unlikely to favor the government, even though it would be couched in nuanced terms, espousing the need for national harmony and stability.

Nopporn Wong-Anan