BANGKOK, THAILAND - THOUSANDS of protesters besieging Thailand's main government complex refused to leave on Wednesday as authorities scrambled to negotiate a peaceful end to the administration's most serious challenge yet.

As riot police moved in, leaders of the People's Alliance for Democracy (PAD) vowed to stay inside the Government House compound until Prime Minister Samak Sundaravej bows to their demands to step down.

Early scuffles between police and protesters who had camped out overnight led to minor injuries, deputy national police spokesman Major General Surapol Tuanthong said, but he insisted there would be no violence.

On Tuesday, up to 35,000 demonstrators had stormed a state-run television station, invaded the grounds of Government House and besieged at least three ministries, stepping up a campaign to bring down Samak's administration.

Police said more than 10,000 protesters remained inside the compound, while an AFP correspondent at the scene saw hundreds of police, some with batons and shields, entering the enclosure.

The security forces appeared relaxed, many sitting and watching the ongoing rally on the manicured lawns of Government House.

Police refused to disclose how many officers were stationed in and around the complex, only that it was enough to maintain law and order.

Senior officers have been trying to negotiate with the protest leaders but 'so far there is no positive response from them,' deputy government spokesman Nuttawut Saikuae earlier told state television.

Mr Nuttawut said he was confident the face-off could be resolved peacefully, but the health ministry put out a statement ordering hospitals to be on alert and asked medical staff not to take any leave.

The PAD movement, which has been protesting since May, says that Mr Samak is a proxy running the country on behalf of former premier Thaksin Shinawatra, who was ousted in a 2006 coup and is barred from holding office.

Mr Samak, who won elections last December and formed his coalition government in February, has said he will not resign.

Mr Somsak Kosaisuk, one of the protest leaders, vowed demonstrators would not surrender.

'If you want to arrest us, come here and arrest us here - it is the government who must go,' he told protesters, most of whom were wearing yellow shirts out of allegiance to revered King Bhumibol Adulyadej.

Mr Samak, who was working Wednesday from army headquarters, said on Tuesday that his approach would be 'soft and gentle' and that police would simply surround the seat of government until everyone had left.

'They (the PAD) want bloodshed in the country, they want the military to come out and stage a coup again,' Mr Samak told a press conference.

Mr Samak has won praise from Thailand's often-hostile English-language press, with a poll published on Tuesday showing nearly 68 percent of Bangkok residents surveyed did not agree with the Government House siege.

PAD protests in early 2006 helped lead to the putsch that unseated Thaksin, and the entry to government of his ally Mr Samak infuriated the old power elites in the military and palace.

Thitinan Pongsudhirak, a political analyst based at Bangkok's Chulalongkorn university, said the protest could backfire as Bangkok residents tire of the disruption.

'They have broken the law and it could be a serious setback for them,' he said. 'The government has a lot of options - they have time on their side.' Since taking office, Mr Samak has faced a series of setbacks.

Court decisions forced three top government officials to resign while the ongoing PAD protests have helped send the stock market down nearly 18 percent since May.