Charan did not explain why or how the government made the move but security officials think it was political in nature. They described it as a goodwill gesture to the restive southernmost provinces, which have been gripped by relentless violence and killings.

Sources in the government said the idea was initially floated by Army chief General Sonthi Boonyaratglin as part of a reconciliation effort to bridge the gap between the state and the Malay-speaking community in the far South as trust between the two sides had sunk to near all-time lows.

The sources said the Army chief and his advisers believed that a great number of wanted insurgents were trumped up by the Thaksin administration for political gain, as well as by police, who were looking to gain financially from arrests.

There have been indications that a number of suspects have sent messages to the government that they were willing to surrender and stand trial, according to a Justice Ministry source. However, it is not clear suspects, if any, plan to give themselves up.

Sapae-ing Basor, the former principal of Thammawithya School in Yala, is the most wanted suspect, with a Bt10 million reward for his arrest. Four others each have a tag of Bt2 million on them. In all, around 30 people have a price on their heads.

No police would comment on the move but an intelligence officer said it was likely to affect the morale of law enforcement personnel.

Officials admitted that reward money had been one of the motivations - as well as a source of inter-agency rivalry.

Former commander of the Crime Suppression Unit, Pol Lt General Priewphan Damaphong, used to dispatch a team of commandos down South to chase for suspects, while local police were more or less sidelined from the action, the source alleged.

Meanwhile, a Bangkok criminal court released 14 Islamic teachers, or "ustaz", on bail after an intervention by the commander of the Fourth Army Area, Maj-General Viroj Buacharoon, and senior members of the Southern Border Provinces Administrative Centre.

The court set bail at Bt500,000 for each of the suspects accused of being members of separatist organisations, including the Barisan Revolusi Nasional.

They were arrested at various times over the past two years on a wide range of charges, including treason and illicit underground activities, relating to the ongoing insurgency in the far South.

A senior government official, who spoke on condition of anonymity, said the 14 were released in the hope that their temporary release would help ease the tension in the region.

In a related development, National Security Council's secretary general Prakit Prachon-prajanuk, announced a three month extension of the Emergency Law for the southernmost provinces.

Prakit said continuing strife in the troubled region warranted the controversial law being extended. The issue would be reconsidered in another three months.