PATTAYA, Thailand (Reuters) - A summit of Asian leaders in Thailand was cancelled on Saturday after anti-government protesters swarmed into the meeting's venue, renewing doubts about the durability of the government.
The events will pile more pressure on an economy teetering on the brink of recession, especially if foreign tourists are put off by the scenes of chaos and emboldened protesters intensify the fight to kick out Prime Minister Abhisit Vejjajiva.
Abhisit imposed a state of emergency for a few hours in Pattaya, a resort about 150 kms (90 miles) south of Bangkok best known for its racy nightlife and as a port of call for U.S. sailors, which was to host the East Asia Summit.
He lifted it after the foreign leaders had left the country. About half of them had had to be evacuated by helicopter from the venue to a nearby military airbase.
The summit fiasco is a huge embarrassment for Abhisit's government, which came to power in December through parliamentary defections that the opposition says were engineered by the army.
The weekend's events will also raise questions about how enduring his government can be.
Four prime ministers over the past 15 months have failed to resolve Thailand's deep political rift between the royalist, military and business elite on the one hand, and a rural majority loyal to ousted Prime Minister Thaksin Shinawatra on the other.
Asked by Reuters if he planned to resign, Abhisit said simply: "We have to restore law and order."
On Saturday, hundreds of red-shirted Thaksin supporters broke through lines of soldiers and invaded the media centre adjacent to the summit venue, the Royal Cliff hotel, blowing whistles, waving flags and shouting "Abhisit Out.
Troops tried to stop them, but "red shirts" and soldiers came hurtling through a huge picture window at the media centre in a furious scrum. Soldiers then bolted down the road to protect the hotel where Asian leaders were to hold a lunch.
After rampaging about the media centre, an elderly woman in a wheelchair among them, the "red shirts" were soon huddled with reporters in impromptu news conferences around the conference centre, denouncing Abhisit's government as "anti-poor."
The East Asia Summit brings together the 10 member nations of the Association of South East Asian Nations (ASEAN) and China, Japan, South Korea, India, Australia and New Zealand for discussions about trade, economic issues and regional security.
Investors are likely to see the government's failure to stop the demonstrators getting anywhere near the summit as a sign of Abhisit's indecisiveness, even if his aim was to avoid bloodshed. It could even threaten the British-born and Oxford-educated Abhisit's leadership of the Democrat Party.
Kongkiat Opaswongkarn, chief executive of Asia Plus Securities in Bangkok, called it "a huge, huge embarrassment."
"The economy is already bad and after such an event, it's pretty obvious business sectors like tourism will really fall off the cliff," he said.
The disorder may mean losses worth no less than the estimated $3.7 billion (2.5 bilion pounds) caused by the closure of Bangkok's two main airports late last year during previous unrest, said Kongkrit Hiranyakij, president of the Tourism Council of Thailand.
The red shirts quickly abandoned Pattaya and headed back to Bangkok to resume the protests there, although the capital is in holiday mode for the Thai New Year. On Wednesday, they assembled 100,000 people around Government House, turning the centre of the capital into a sea of red.
"We are leaving for Government House to continue fighting," said protester Kittisak Chimplewanasom. "We won this time, as we were able to show ASEAN that we don't need this prime minister."
Thaksin, who lives in self-imposed exile to avoid jail on a corruption conviction and is thought to be bankrolling the protests, phoned in to his "red shirts" at Government House in the evening.
Less rabble-rousing than on some occasions, he thanked them for their sacrifice at this holiday time and asked them to be patient for a few more days as they were on the point of achieving something.
"If our people in Bangkok and all the provinces unite, ... I think this time we can change the country. We will see real democracy with the king as the head of state," he said.
He is aiming to force Abhisit out and get new elections, which his supporters would most likely win.
The billionaire was ousted in a 2006 coup, but his reconstituted party regained power after elections, sparking months of protests last year by yellow-shirted opponents.
The "red shirts" say they had intended to protest peacefully but became infuriated when blue-shirted, pro-government vigilantes arrived, armed with clubs, bricks and slingshots. Thaksin alleged these were police and soldiers in disguise.
(Additional reporting by Isabel Reynolds, Martin Petty and John Ruwitch in Pattaya, Viparat Jantraprap, Kittipong Soonprasert and Panarat Thepgumpanat in Bangkok; Editing by Alan Raybould and John Chalmers)