Soldiers have entered Government House and tanks have moved into position around the building.

Mr Thaksin, who is at the UN in New York, announced he had removed the chief of the army and had ordered troops not to "move illegally".

An army-owned TV station is showing images of the royal family and songs linked in the past with military coups.

Correspondents say that there have been low-level rumours of a possible coup for weeks.

Thai media say that two army factions appear to be heading for a clash, with one side backing the prime minister and the other side backing a rebel army chief.

Our correspondent Jonathan Head said it was not clear which faction had taken the initiative.

He said there has been pressure growing on the prime minister to resign, following a political impasse in which April's general election was declared invalid.

But it was thought that Thailand was making progress towards holding another election later in the year, our correspondent says.

At the United Nations, where the annual General Assembly is under way, it was announced that the agenda had been changed to allow Mr Thaksin to address it in the coming hours.