Surayud insisted, however, that separatists responsible for deadly attacks in the South were not funded by international organisations.

"It is confirmed that the separatists were able continue their attacks and raids because they were funded by the Thai tom yum kung network of restaurants. The restaurants - big and small - collected money through blackmail and demands for protection fees from local businessmen and channelled it to the separatists," the PM said.

The government was trying to break up the network, he said, in a bid to halt violent attacks in Narathiwat, Pattani and Yala provinces.

There are hundreds of tom yum kung stalls and restaurants along the Thai-Malaysian border, mostly in the city of Kota Baru in Kelantan, plus many in the capital Kuala Lumpur. Most are owned by Thai Muslims from the three troubled southern provinces.

However, a former member of the peace panel, Ahmed Somboon Buanluang, dismissed Surayud's comment saying it was a destructive statement as the many thousands of tom yum kung restaurants throughout Malaysia generated a lot of income for Thailand.

"I don't want to say the prime minister is locked into out-of-date information which had caused the previous government to fail in its efforts to restore peace in the deep South," Somboon said.

Surayud will hold a special Cabinet meeting tomorrow with southern violence on the agenda.

The violence erupted at the beginning of 2004 and has now claimed more than 1,700 lives.

Meanwhile, authorities in Yala province were on alert yesterday for possible sabotage of the Bang Lang dam after it was revealed that pictures of the dam were found on a computer confiscated after a raid on the home of a suspected militant in Bannang Sata district.

"We have to raise our guard high as many informants have indicated high possibility of an attack, perhaps on November 28," said Yala governor Nathaphol Wichianpruet.

"If the militants really do launch an attack on the dam, it could cause great damage to people in the area," he said.

The governor revealed militants planned to launch a series of attacks on several places in the province, notably in Bannang Sata district.

Managers of the hydropower Bang Lang dam have urged security officials to boost the number of troops protecting its power plant, according to Niphon Arunsri, assistant manager at the plant. Security guards were deployed to protect the plant and electricity transmission lines around the clock, he said.

If the plant was damaged or had an emergency Egat could provide reserve power to all of Yala within half an hour, a plant official said.