By Ambika Ahuja
BANGKOK (Reuters) - Thai authorities plan to cut water, electricity and food supplies to thousands of protesters occupying Bangkok's main shopping district for nearly six weeks and said they might resort to force if they fail to disperse.
The threats follow the unravelling of a peace plan proposed last week by Prime Minister Abhisit Vejjajiva to end a political crisis that has killed 29 people, paralysed parts of Bangkok and slowed growth in Southeast Asia's second-biggest economy.
Leaders of the mostly rural and urban poor protesters remained defiant Wednesday, refusing to leave their 3 sq km (1.2 sq mile) encampment in Bangkok's main shopping district and challenging the government from behind medieval-like walls built of tyres, sharpened bamboo staves and large trucks.
"We will die here if we must. Your threat will not work," Nattawut Saikua, a protest leader, told cheering supporters.
Talks to resolve the impasse have been called off and a proposed November election scrapped, said Korbsak Sabhavasu, the prime minister's secretary-general.
At midnight, authorities will shut off power, cut supplies and seal entrances to the protest site, said army spokesman Sansern Kaewkamnerd at the government's crisis control centre.
"The measures to cut water and power are the first measures. If the protest does not end, we have to fully enforce the law, which may involve using force to reclaim the area," he said.
Severing supplies presents a huge logistical challenge in an area crowded with hotels, embassies, businesses, high-end apartments and two public hospitals. The protesters said they would survive with their own power generators and food sources.
Attempts to intercept their supplies also risk clashes on the fringes of the area or inside their sprawling tented camp, where women and children were among about 5,000 protesters.
"I don't see how cutting supplies could be effective," said Karn Yuenyong, director of independent think-tank Siam Intelligence Unit. "They will have to do it in a large area which would affect a lot of people. It's not an easy task and may not be worth it, especially if protesters can bypass it."
He said it could also spark violence following a series of clashes, grenade attacks and shootings since April 10 when a failed attempt to disperse protesters in another area of Bangkok led to a night of fighting that killed 25 people.
"A resolution without a clash is becoming increasingly unlikely," he added.
SQUEEZING ECONOMY
Thailand's finance minister said the crisis could trim 0.3 percentage point off Thailand's targeted annual growth rate this year of 4.5 to 5 percent.
Prime Minister Abhisit Vejjajiva had offered an election on November 14 -- a year before one is due -- to try to end rallies that began in mid-March with a demand for an immediate poll.
The red-shirted protesters, mostly supporters of former Prime Minister Thaksin Shinawatra who was ousted in a coup in 2006, accepted the election date -- an offer now withdrawn -- but are pushing other demands.
They say the British-born, Oxford-educated Abhisit lacks a popular mandate after coming to power in a parliamentary vote 17 months ago and heading a coalition the military helped cobble together after the courts dissolved a pro-Thaksin party.
Some of their leaders now face terrorism charges connected to the protests and say they will only disperse if a deputy prime minister faces criminal charges over the April 10 clash, accusing the government of double standards.
As tensions mounted, several major apartment complexes in the area urged tenants to find alternative accommodation. "We strongly advise you to...temporarily vacate the building today until normalcy returns," one landlord told tenants in an e-mail.
At the protest site, where a ramshackle network of tents, trailers, food stalls and mobile toilets has spread across some of the capital's smartest streets, there was no sign of protesters packing up or greater security force activity.
"It just shows they are not interested in making up," said Komsan Sukpradit, a 48-year-old red shirt guard patrolling the area after getting blessed by a chanting Buddhist monk. "They will crush us given a chance and we can't let that happen."
Sirinaj Jantoh, who works at a marketing agency in the area, said she feared the government's threat may escalate tension.
"It's going to make it harder to come in to work," she said. "Maybe we will work from home for a while, especially if there is no power. I just hope the red shirts leave soon -- they have caused enough trouble already."
The protests are the latest instalment in a political crisis that has festered since Thaksin's populist premiership, exposing deep divisions between the rural and urban poor and the Bangkok middle classes and traditional royalist elite.
Foreign investors have turned negative since violence flared in April and have sold 17.4 billion baht (361 million pounds) in Thai shares in the past five sessions, cutting their net buying so far this year to 21 billion baht as of Tuesday.
(Additional reporting by Chalathip Thirasoonthrakul and Ploy Ten Kate; Writing by Jason Szep; Editing by Alex Richardson)
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