BANGKOK, THIALAND - THAILAND'S governing coalition is prepared to re-elect Samak Sundaravej as prime minister, despite a court ruling on Tuesday ordering him to resign, a top official in the ruling People Power Party said.

'The PPP-led coalition is still willing support Samak for re-election as prime minister, unless he declines to run. But I believe he will fight,' said PPP deputy leader Kan Tienkaew.

'We respect the verdict, but this case is too technical. We hope that we can urgently elect the new prime minister in parliament tomorrow,' he said.

Mr Samak Sundaravej and his entire cabinet must resign over the scandal surrounding his TV cooking show, the Constitutional Court said on Tuesday.

The court, which said Mr Samak had violated the constitution by accepting payments for hosting the show, ruled he must stand down immediately.

His cabinet could remain as a caretaker administration for 30 days until parliament elects a new prime minister.

The PPP's continued support for Mr Samak, which renders the court decision largely irrelevant, is likely to outrage protesters barricaded inside Mr Samak's Government House compound for the last two weeks demanding his resignation.

Analysts had expected Thai markets to react positively to a court ruling against Mr Samak, seeing it as a possible short-term solution to three years of political turmoil.

That is unlikely now to be the case.

The main gripe of the People's Alliance for Democracy (PAD) is that Mr Samak is a puppet of Thaksin Shinawatra, who was removed as PM by the army in a 2006 coup.

However, the PAD, a hodgepodge group of royalist businessmen, academics and activists united by their hatred of Mr Thaksin, thought they had cornered Samak on conflict of interest charges for hosting the commercial TV cooking programmes while in office.

'I have done nothing wrong,' he told the court on Monday, suggesting the case was politically motivated.

He gave up the show in April, more than two months after becoming prime minister.

The speed of the verdict surprised both the government and analysts.

Mr Samak was in the northeastern province of Udon Thani on Tuesday, chairing a 'mobile' weekly cabinet meeting necessitated by the protest blockade on his offices.

At a pro-government rally on Monday evening in the town, a stronghold for his seven-month old government, the pugnacious 73-year-old vowed not to resign or call a snap election.

'I declare that I will not dissolve parliament. I will not quit. I will fight on,' he told thousands of cheering supporters.

Stand-off
The stand-off between the government and PAD has paralysed administration decision-making at a time of slowing economic growth and high inflation.

It has also scared away visitors to the 'Land of Smiles', with airlines and hotels reporting cancellations as more countries issue travel warnings in the wake of Mr Samak's declaration last week of a state of emergency.

The tension spilt over into bloodshed last week when a man was killed in a street battle between pro- and anti-government groups, trigging a declaration of a state of emergency from Mr Samak that the highly politicised army chose to ignore.

Two years after its removal of Thaksin in a coup, the army has insisted it will not intervene again, but senior officers acknowledge the political crisis has reached a stalemate.

If the deadlock continues or more people are hurt or killed, the crisis could also trigger a move by revered King Bhumibol Adulyadej, who has stepped into several disputes during his six decades on the throne.

In 2006, when Thaksin was facing a prolonged campaign by the PAD, the king summoned the country's top judges to tell them to resolve the political 'mess' after the opposition boycotted a general election, rendering the result void. -- REUTERS/AFP