A court in Thailand dealt a crushing blow yesterday to the political and financial future of Thaksin Shinawatra when it convicted the deposed Prime Minister’s wife of evading millions of dollars in taxes.

Hailed by many as a landmark event in Thai political history, the verdict marks the first successful conviction against the once hugely influential family: the spectacle of such a high-profile conviction, said MPs, means that a jail sentence for Mr Thaksin himself is no longer implausible to the Thai public.

Mr Thaksin and his wife Pojaman, 51, face a dozen other corruption-related cases brought in the wake of his dramatic expulsion from power two years ago.

With the entire scene broadcast on live national television, Pojaman Shinawatra left the court smiling and flanked by her husband and children. She was found guilty of tax fraud along with her brother and secretary and sentence to three years in prison.

The trio was released on bail of 5 million baht (£75,000) each and, by exploiting a special travel permission, the entire family is now expected to leave Thailand immediately.

Having suffered the humiliation of seeing his wife convicted, Mr Thaksin, the former billionaire who owns Manchester City football club and was thrust from power in a 2006 coup, now faces what could be a long summer of further battery to his reputation.

Korn Chatikavanji, the deputy leader of the Democrat Party told The Times that Thursday’s verdict vindicated the opposition’s long-standing accusations of corruption within the Thaksin camp. Because investigators took more than 18 months to prepare their cases against the family, the ousted Prime Minister’s supporters had condemned the lack of solid evidence.

“Previously, the Thaksin camp had been saying “so where are these cases against Mr Thaksin?” and now those days are here,” he said.

Government insiders said that the explosive verdict, which suggests a bold new confidence within the legal system, threatens to light a fire under Thailand’s already volatile politics. The current Government, which was elected because of its overt links to Mr Thaksin and his continuing strong support in the countryside, is seen as another likely victim of yesterday’s verdict. An expected cabinet reshuffle, said political analysts, will be little more than cosmetic.

But the ruling party’s attempts to swing the balance in Mr Thaksin’s favour may not be exhausted. By early next week, the Government plans to submit an amendment to the constitution that would declare the agencies that have pursued the Thaksin corruption investigations unconstitutional. The hugely controversial amendment, said analysts, could further erode the former Prime Minister’s support base.

While few yet see yesterday’s court result as the trigger for another coup, at the very least, said opposition MPs, it will destroy all prospects of Mr Thaksin himself ever returning to power.

Although confidently predicted by members of the opposition Democratic Party, Pojaman Shinawatra’s conviction was a surprise to many veteran observers of Thai justice. People of immense power and wealth, said one, have historically been able to depend on the leniency of the courts precisely because of their influence.

“The conviction today was very, very significant indeed because it tells the Thai people that the justice process is working again after coming under so much criticism,” said Kavi Chongkittavorn, a political commentator. “We are now at the beginning of the collapse of the Thaksin empire.”

A spokesperson for Pojaman Shinawatra said that the family would appeal the verdict. The case revolved around a highly complex transfer of stock in the family’s communications business and involved shares being placed in the name of one of the Thaksins’ maids.

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