The leaders of Thailand's military coup clamped down on the country's political parties today, banning meetings and the formation of new parties until further notice.

Two days after the Thai Prime Minister was toppled by a bloodless putsch while he was attending the UN General Assembly in New York, Lieutenant-General Sondhi Boonyaratglin ordered political groups to stop holding meetings until a series of constitutional reforms were completed.

No timeframe was given for the ban, but the coup leaders have estimated that will take a year for the consitution to be changed and for fresh general elections to be held.

"The Council for Democratic Reform Under Constitutional Monarchy (CDRM) has ordered political parties to halt all meetings and political activities," read the statement, issued by the army commander-in-chief, whose coup was endorsed by Thailand's elderly King Bhumibol Adulyadej yesterday.

Thailand has technically been under martial law since Tuesday night, when tanks surrounded Government House in Bangkok and power was taken from the Prime Minister, Thaksin Shinawatra. The army has banned all meetings of five people or more and the distribution of information critical to the coup on the internet.

Mr Thaksin, who has sought exile in London, today called on the coup leaders to hold elections as quickly as possible and asked all Thailand's political parties to work in the common interest.

"The event in Thailand during the last two days should not detract from my main aim of national reconciliation," Mr Thaksin was quoted in a statement that was signed by his secretariat and handed to reporters outside his flat in London.

"Therefore, he would like to urge all parties to find ways and means to reconcile and work torward national reconcilation for the sake of our King and country. He hopes the new regime will quickly arrange a new general election and continue to uphold the principles of democracy for the future of all Thai."

Mr Thaksin's aides said the telecoms billionaire was planning to take a deserved rest and then return to Thailand to do research, development and charitable work.

British officials have said that there was a tacit agreement to allow the ousted Prime Minister to remain in London, but that could change if he attempts to rebuild his power base and launch a political comeback from Britain.

His return to Thailand could be stymied by reports that the coup leaders are keen to investigate his financial dealings. Mr Thaksin earned a tax-free windfall of £1.14 billion earlier this year from the sale of his Shin Corp business empire.

The last months of Mr Thaksin's Government were marked by near-daily mass protests in Bangkok, a disputed election that gave way to constitutional crisis and increasing differences between Thailand's urban and rural communities and the country's north and south.

In Thailand, the ban on political gatherings was greeted with equanimity by a population that has described Tuesday's coup as the gentlest in memory. The last military takeover, in 1991, was bloodied by the shooting of 50 pro-democracy protesters in Bangkok.

"It was anticipated," said Korn Chatikavanij, a senior member of the opposition Democrat Party, of the shutdown. "It’s not really possible to organise activities with fewer than five people... We respect the council’s need for stability and we will abide by it."

Mr Korn's leader, Abhisit Vejjajiva, also accepted the new rules but demanded elections within six months: "We are encouraged that they don’t want to hold onto power and that their job is to put the country back on the democratic path," he told Reuters. "But they have to prove it and prove it as soon as possible."

Today the Thai capital returned, by and large, to normal, with shops re-opening and the traffic heaving with its customary intensity. Tanks and armoured vehicles remained visible on the streets, but many were festooned with flowers and photographed by curious crowds. "No Thaksin" t-shirts sold briskly from market stalls.

Thai political commentators have attributed much of the tranquillity to a statement blessing the coup from King Bhumibol, who celebrated 60 years of rule earlier this year. The King asked citizens to obey General Sondhi, whose insistence that he is on the side of democracy has struck a chord with many who perceived Mr Thaksin as a corrupt tycoon, able to bend Thailand's constitution to his own ends.

Thailand's financial markets, however, remained wary of the coup, and experienced a topsy-turvy day.

The Bangkok stock exchange closed 1.42 per cent down after recovering from a dramatic fall of 4.2 per cent in the opening minutes of trading. The Governor of the Bank of Thailand said the economy would improve after the coup but Morgan Stanley cut its growth forecast for Thailand for the second half of the year to from 3.5 per cent to 2.4 per cent.

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