The panel's report was submitted to EC chairman Vasana Puemlarp on Monday and seen by The Nation Thursday.

By an unanimous decision, the panel concluded that the ruling party was involved in the campaign fraud deemed detrimental to democracy and the national security both.

The report was prepared by panel chairman Nam Yimyaem, retired vice president of the Supreme Court who was handpicked by Vasana to get to the bottom of the matter.

Vasana appointed the Nam Yimyaem panel last month to look into a complaint against the ruling party filed by Democrat Party secretary general Suthep Thuagsuban.

In his report, Nam said his investigation focused on two key questions - whether the ruling party had paid candidates from small parties to contest the polls and the number of culprits involved.

On the first question, the ruling party was accused of contracting small parties in order to avoid running an unopposed race which would require a minimum support from 20 per cent of eligible voters to validate the balloting outcome.

Based evidence, the panel found that two small parties, Thai Ground and Pattana Chat Thai, had insufficient funds to finance their candidates.

Chawakan Tosawat, candidate from Pattana Chat Thai, gave his statement detailing the financial link between his party and the ruling party.

The panel later uncovered evidence to substantiate the Chawakan statement.

Ratima Phawasri, party-list candidate from Thai Ground, testified about the funding from the ruling party. She also submitted financial records to back up her statement.

Even though she later retracted her statement, her signatures on the financial records remain the physical evidence to implicate her.

Her party leader Boonitthiphol Chinrat confirmed that his party was not in the financial position to fund its candidates.

In regard to culprits involved, the panel found that a total of 140 candidates from the two small parties had filed false records for party membership in order to qualify for the race.

It singled out two Thai Rak Thai executives, Thamarak Isarangura and Pongsak Ruktapongpisal, as masterminds in the funding of small parties.

"The campaign violations committed by the two executives have benefitted their ruling party helping it to cling to the state power via means not sanctioned by the Constitution," it said.

The violations have also undermined the national security and constituted a number of offences as per the Criminal Code and the election law, it added.

Two senior military officers, General Trairong Intharathat and Lt General Padungsak Klingsanoh, were implicated in the violations in their capacity as aides to Thamarak, who is also the defence minister.

The panel recommended for the legal proceedings against Thaksin on grounds that he be held accountable for his party's involvement in the campaign violations.