TANKS and armed soldiers were enforcing martial law on the streets of Bangkok this morning after the Thai Army launched a lightning coup against Thaksin Shinawatra, the Prime Minister, while he was attending the UN General Assembly in New York.

An army statement said that its commander, Lieutenant-General Sondhi Boonyaratglin, had taken control of the country, and claimed that he was in consultations with the king, Bhumibol Adulyadej.

The coup was the climax of a year of political unrest surrounding Mr Thaksin, a bitterly divisive figure who has won three election victories, but provoked the contempt and hatred of many urban, middle-class Thais. Vast crowds of demonstrators have rallied in Bangkok calling for his resignation, and at various moments there have been wild rumours of imminent coups. But last night’s events came out of the blue.

The turmoil raised fears over economic stability in Thailand, which less than a decade ago sparked the Asian financial crisis. The Thai baht weakened slightly yesterday as some nervous investors moved their money into the safety of the dollar, but there was no sign of the financial panic which dragged down the whole region in 1997.

Tens of thousands of Britons, including about 2,000 holidaymakers, are currently in Thailand. They were advised by the Foreign Office to avoid large crowds and demonstrations.

In a televised statement, General Sondhi said that the military had seized power temporarily, and suspended the constitution, but that sovereignty would be “returned to the Thai people as soon as possible”. He ordered all troops to report to their stations and not leave without permission from their commanders.

The general, a Muslim in a predominantly Buddhist country, who is believed to be close to the king, that the coup was necessary because “the democratically elected government had caused unprecedented division in Thai society”. There were reports that members of Mr Thaksin’s Government, including his Deputy Prime Minister, Chitchai Wannasathit, and the Defence Minister, Thammarak Isaragura na Ayuthaya, had been arrested by the military, and had resigned. “The Government is no longer administering the country,” Colonel Akara Chitroj, an army spokesman, said. “I think Mr Thaksin will not return to Thailand for the time being.”

But in New York, Mr Thaksin insisted that he remained Prime Minister. Spokesmen said that he remained calm although his planned address to the General Assembly on the situation was cancelled. “Some of the military officials came out and tried to make a coup attempt but we confirmed that they cannot succeed,” Surapong Suebwonglee, a government spokesman, said. “Now we’re in control.”

In Bangkok, loudspeakers mounted in tanks urged people to return home but, despite unconfirmed reports of shooting, there appeared to have been no bloodshed. Tourist bars and hotels a few miles from the centre of the coup were unaffected.

Thai television broadcast a message from Mr Thaksin announcing that General Sondhi was to hand over his command to Mr Chitchai, and instituting a state of emergency. Regular television programmes were then replaced by images of the Royal Family and patriotic songs.

Some 14 tanks took up positions in front of Mr Thaksin’s offices in Government House and the nearby Royal Palace.

Coups used to occur every few years in Thailand, but this is the first for 15 years and the first use of military force in political disputes since 200 people were killed when troops opened fire on anti-government demonstrators in 1992. In that time, democratic elections appeared to have become firmly established although that stability has been undermined by the bitterly divided attitudes to Mr Thaksin.

Thailand is home to 45,000 British passport holders. A Foreign Office spokeswoman said that although there are only 20,000 registered Britons in the country, mainly expatriates, many more are visiting and reside there. Thailand attracts 750,000 British tourists every year, although the peak season is not until December.

The Foreign Office advised people about to travel to look out for the latest information before setting off. A notice on its website also instructed tourists to restrict movements around government buildings and in public until the situation becomes clearer.

The spokeswoman added: “If anyone is concerned about a relative in Thailand, they should contact them directly, because communications are still operating normally.

“We are monitoring the situation closely and will update our site as and when a clear picture emerges.”

A spokeswoman for Thomson, Britain’s largest holiday operator, said that it was not running any charter holidays to Thailand until the winter, but that there were 194 holidaymakers in the country on tailormade packages.

British companies were monitoring developments. Tesco, Boots, Marks & Spencer and Cadbury Schweppes are among operating in the country.

Thailand is Tesco’s third largest market, after South Korea and Britain, generating sales of just under £1 billion last year. It has a 200-strong chain of stores and is planning to open a further 170 there this year.

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