Riot police gather at besieged Thai airport

Dozens of riot police with truncheons and shields gathered at Bangkok's Suvarnabhumi airport today after talks with anti-government protesters apparently failed to end a crippling blockade.

A Reuters correspondent saw 100 police set up a perimeter at the airport headquarters building, about 300 metres (yards) from where the People's Alliance for Democracy (PAD) protesters had besieged the main terminal.

Earlier, police said they hoped talks with protest leaders would end the siege, but warned they would "take other steps" if they failed.

"We are asking them to allow the airport to resume operations," Lieutenant-General Suchart Muenkaew, the chief police negotiator, told reporters.

"We will keep talking, but if it fails we will take other steps. The last step will be to disperse them."

The siege at Don Muang and Suvarnabhumi International Airport have cut the Thai capital's air links to the world, leaving thousands stranded and hurting the tourist-dependent economy.

The University of the Thai Chamber of Commerce said if the political turmoil and airport closures go on for another month, it would cost the economy up to 215 billion baht ($6 billion).

A government spokesman said the economy could lose at least 100 billion baht ($2.8 billion) if the sieges drag on for a month, and GDP growth for the year could be cut to 4 percent from a current estimate of 4.5 percent, already a seven-year low.

"While the question on whether the mess can be cleared up in a year is still an important one, the question on whether confidence would return even if it does get cleaned up in a month is beginning to look less clear," said Carl Rajoo, an economist at Forecast in Singapore.

Declaring a state of emergency at the airports from the government stronghold of Chiang Mai, 700 km (400 miles) north of Bangkok, Prime Minister Somchai Wongsawat said the export- and tourism-driven economy could not tolerate further disruption.

But with security forces reluctant to act, and the protesters insisting they'll stay out until the government falls, the standoff could continue.

PAD guards had set up roadblocks on the main expressway to the airport and were stopping all cars and checking passengers and trunk compartments.

The roadblocks were manned by youths in black jackets, faces partly covered by masks. Some wore body armour and wielded wooden stakes and golf clubs.

"We will not leave. We will use human shields against the police if they try to disperse us," PAD leader Suriyasai Katasila told Reuters.

Thailand's three-year-old political crisis has deepened dramatically since the PAD began a "final battle" on Monday to unseat a government it accuses of being a pawn of former leader Thaksin Shinawatra, ousted in a 2006 coup. Somchai is Thaksin's brother-in-law.

Pressure has built on the army to step in since Somchai rejected military calls to quit, but pro-government forces threaten to take up arms if the elected administration is ousted, raising fears of major civil unrest.

Army chief Anupong has repeatedly said he would not take over, arguing the military is powerless to heal fundamental political rifts between the Bangkok elite and middle classes who despise Thaksin, and the poor rural and urban majority who love him.

But rumours of the army preparing to launch what would be Thailand's 19th coup or attempted coup in 76 years of on-off democracy continue to swirl around the capital.

The government began shuttling thousands of stranded tourists by bus to U-Tapao, a Vietnam War-era naval airbase 150 km (90 miles) east of Bangkok, as an alternative landing site for airlines.

According to a schedule hand written on a white board outside the terminal, flights from Cathay Pacific, Thai Airways and Malaysian Air Services were expected.

In bound flights bringing tourists for the peak season were expected to start arriving on Friday as well.

"Don't forget we're not Suvarnabhumi or Don Muang airports. The convenience and speed of services should be not be the same," warned Rear Admiral Surapong Ayasanond deputy director at U-Tapao.