Tens of thousands of protesters defied orders to leave the Thai capital's main shopping district on Sunday despite threats of mass arrests, upping the ante on the fourth week of a bold street rally to press for fresh elections.

The government said the red-shirted protesters who overran a a district housing sleek upmarket department stores and five-star hotels on Saturday could each face up to a year in jail and a 20,000 baht ($620) fine if they don't leave.

The gathering was in clear violation of a tough Internal Security Act imposed last month, said the Center for Administration of Peace and Order, a special government body set up to keep security during the protests.

"The blockade of roads around the intersection is an exercise of public rights beyond what the constitution provides," Prime Minister Abhisit Vejjajiva said after talks between authorities and the protesters yielded nothing substantive.   

The more than 50,000 protesters also ignored a deadline at 9 pm (local time) on Saturday to leave the area where Central World, the second-largest shopping complex in Southeast Asia, and half a dozen other big malls and retailers shut their doors in response to threats by the protesters to stay for days.

The mostly rural and working-class demonstrators have said they will not leave until Abhisit's government dissolves parliament and calls elections.   

Protest leader Veera Musikapong told Reuters his "red shirts" would remain until at least Monday. "We have no choice but to step up civil disobedience until the government listens," he said.

"This area is a symbol of Bangkok elite. We want to show them they cannot rule without consensus of the people."    
Backed by Thailand's powerful military and royalist establishment, Abhisit said a peaceful poll now would be difficult given the tensions and repeated his recent offer to dissolve parliament in December, a year early.

"I am not trying to do anything simply to cling to my job, nor do I attache priority to staying full term," he said.

The British-born, Oxford-educated economist urged Bangkok's 15 million people to show restraint as frustration mounts.

Analysts say Abhisit would likely lose an election if it were held now, raising investment risks in Southeast Asia's second-biggest economy following a $1.6 billion surge of foreign investment in Thai stocks over the past five weeks on expectations Abhisit will survive the showdown.

The "red shirts", supporters of twice-elected and now fugitive former prime minister Thaksin Shinawatra, say Abhisit has no popular mandate and came to power illegitimately, heading a coalition the military cobbled together after courts dissolved a pro-Thaksin party that led the previous government.

Abhisit says he was voted into office by the same parliament that picked his Thaksin-allied predecessors. "Simply winning enough votes in parliament does not mean he is accepted by people," said Nattawut Saikua, a protest leader.   

Seizing an area to oust leaders is becoming a common tactic in politically tense Thailand. In 2008, yellow-shirted protesters who opposed Thaksin's allies in the previous government occupied the prime minister's office for three months and then blockaded Bangkok's main airport until a court expelled the government.

At the centre of the impasse is Thaksin, seen as authoritarian and corrupt before he was ousted in a 2006 coup but a rallying symbol for the poor as the first Thai civilian leader to reach out to rural voters in his 2001 election campaign.   

The 60-year-old former telecommunications tycoon often rallies supporters through social networking site Twitter from self-imposed exile, mostly in Dubai. On Saturday, he "tweeted" that the "red shirts" should continue occupying the area.

The occupation of one Bangkok's biggest commercial districts has stoked concerns about a rippling impact on tourism and the economy ahead of Thailand's April 13-15 Songkran holidays.

"We have nothing against peaceful democratic protests, but this has affected the normal way of life," said Apichart Singka-aree, director and former president of the private Association of Thai Travel Agents. "Out of some 100 previously booked flights for Chinese tourists to fly in for the Songkran festival, over 60 have been cancelled. We are trying to save the remaining 30 something flights," he told Reuters. - Reuters