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By Panarat Thepgumpanat and Martin Petty
BANGKOK (Reuters) - Thailand's government rejected a call from the Election Commission (EC) on Thursday to postpone a February vote after clashes between police and anti-government protesters in which a policeman was killed and nearly 100 people were hurt.
The EC urged the government to delay the February 2 election until there was "mutual consent" from all sides. But such consent looks highly unlikely given the polarization of Thailand's politics and the intensifying conflict.
Prime Minister Yingluck Shinawatra's ruling Puea Thai party would likely win an election. The protesters are demanding that Yingluck steps down and political reforms be introduced before any vote, to try to neutralize the power of the billionaire Shinawatra family.
The violence erupted on Thursday when protesters tried to storm a venue where a draw for election ballot numbers was being held and police fired teargas and rubber bullets to keep the rock-throwing crowd back.
The policeman was killed and three were wounded by gunshots from an unknown attacker who was believed to have been overlooking the clashes from a building.
The protesters want the suspension of what they say is a fragile democracy subverted by Yingluck's influential self-exiled brother, former premier Thaksin Shinawatra.
The protesters draw strength from the south, Bangkok's middle class and the establishment, who call Yingluck a puppet of Thaksin. The former telecoms tycoon is a populist hero among millions of poor in the north and northeast whose votes have won his parties every election since 2001.
The violence and the EC's call for a postponement spell bad news for a government trying to ride out the storm. Yingluck called the election this month in the hope of defusing the crisis. The government said a delay would be unconstitutional.
"After the dissolution of parliament, an election must be held within 60 days," Deputy Prime Minister Pongthep Thepkanchana said in a televised address. "There is no law allowing the government to delay the election."
The protesters want to set up a "people's council" that would eradicate the influence of the "Thaksin regime" and on Wednesday they rejected a proposal from Yingluck to create an independent reform council.
Yingluck has tried to avoid confrontation, fearing her opponents would stir chaos intentionally to trigger an intervention, either by the military or the judiciary, which have moved against Thaksin's governments in the past.
"The anti-Thaksin camp is trying to push the government to the brink of creating a power vacuum and so an unelected government can take over," said Kan Yuanyong, director of the Siam Intelligence Unit think-tank.
"The real objective here is not about the need for reform, it's to break the Thaksin regime."
CYCLE OF TURMOIL
The scenes of violence have become all too familiar over the past eight years in Thailand, which has been convulsed by protests and interventions by generals and judges that have divided the country broadly between those who love 64-year-old Thaksin, and those who loathe him.
Any attempt to thwart the election would likely enrage Thaksin's loyal supporters, whose rallies in 2010 against a previous government ended with a military crackdown that killed more than 90 people. They have vowed to defend Yingluck.
The EC issued a statement offering to mediate between the two sides, but said it could "exercise its right" to resolve the crisis itself in a January 2 meeting. It did not elaborate.
The weeks of protests have been largely peaceful. At their peak, they have drawn 200,000 people on to the streets of Bangkok for processions. A hard-core of about 500 people were behind the violence on Thursday.
Yingluck has spent much of the past nine days shoring up support in her power base in the north and is not due to return to Bangkok until the New Year.
The crisis has dealt a blow to an economy already suffering from weak spending, falling factory output and sluggish growth of exports, worth 60 percent of gross domestic product.
The Finance Ministry said annual growth of Southeast Asia's second-biggest economy was likely to be 2.8 percent, below the 3 percent target, with confidence hurt by the unrest. It expected 4 percent growth next year, possibly 3.5 percent if the political standoff continued.
The election was made more uncertain on Saturday when the main opposition Democrat Party announced a boycott.
Thailand's oldest party is backed by an establishment of aristocrats, royalists, former generals and old-money families who resent Thaksin's rise and say he is entrenching corruption, damaging the country and undermining the monarchy. Thaksin denies that.
The first two years of Yingluck's government were largely smooth but her party miscalculated in November and tried to push through an amnesty bill that would have nullified Thaksin's 2008 graft conviction and allowed his political return. That sparked the protests.
(Additional reporting by Aukkarapon Niyonyat, Panarat Thepgumpanat and Jutarat Skulpichetrat; Writing by Martin Petty; Editing by Paul Tait and Robert Birsel)