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"Since Thaksin has announced that he will return to politics there is no further need to conceal anything. He has recruited Chaiyasith to become leader of the Puea Thai Party, which would bring the MPs under a new roof in the event that the People Power Party is dissolved," said a well-informed political source.

In the upcoming Cabinet reshuffle, Chaiyasith will also, according to the source, be appointed deputy prime minister in charge of security, replacing General Chavalit Yongchaiyudh, who resigned after the October 7 incident in which police shot tear gas at anti-government protesters. Chavalit has entered the monkhood in Chiang Mai following his controversial role in the October 7 incident.

During the first term of the Thaksin government, Chaiyasith was promoted to army chief, although he was not a strong candidate. Later on he was reshuffled to supreme commander, because Thaksin was not happy with his performance.

The political source said Thaksin had picked Chaiyasith for the dual government and political jobs because he could be trusted and had good connections with the military, though Chaiyasith did not listen to Thaksin during his tenure as army chief.

"Chaiyasith is a better choice than Yingluck Shinawatra or Khunying Pojaman Shinawatra at this point," the source said.

Earlier, a member of the People Power Party hinted that Thaksin or Pojaman might return to Thailand on December 25 in preparation for a new battle in politics.

But sources said it might be too early for Pojaman to return because of her concern for personal security. Moreover, Pojaman is still on bail in a Bt546-million tax-evasion case, in which the lower court has sentenced her to three years in prison.

Pojaman has assigned her lawyers to appeal this, while she has already been cleared of any wrongdoing in the Ratchadaphisek land deal.

Chaiyasith yesterday said he had not been approached to become leader of the Puea Thai Party.

"It is merely a news report. There is no green light as yet. I had no intention of entering politics, but considering how democracy has gone off the rails, I now want to," Chaiyasith said.

He admitted that Yongyuth Tiyapairat, a key aide of Thaksin, had talked to him about taking the job as head of the Puea Thai Party.

"I should like to show the people at Government House how democracy should be done. They have to set up parties and get into politics, like the developed nations," he added.

Meanwhile government spokesman Natthawut Saikua said yesterday that Prime Minister Somchai Wongsawat, who is in Peru for the Asia-Pacific Economic Cooperation summit, might phone in if an urgent Cabinet meeting was called should Sunday's rally by the People's Alliance for Democracy turn violent.

The Army yesterday called for changes of the venue for next week's parliamentary meeting in order to prevent possible violence similar to that on October 7, when the police cracked down on PAD protesters blocking parliamentarians from entering the Parliament compound.