BANGKOK (Reuters) - Thailand's prime minister said on Wednesday he expected his party to have the edge in a mid-year general election but he would probably need to form a coalition to govern, signalling a close and potentially volatile poll.
"We are looking at some time around the first half of this year," Prime Minister Abhisit Vejjajiva told Reuters in an interview. "It is a close election like last time, except that we are slightly ahead. The latest polls show we are ahead in all polls except the northeast."
Thailand's next election is its most important in a decade, given a long-running political crisis that erupted into violent, anti-government "red shirt" protests in April and May in which 91 people were killed and more than 1,800 wounded.
But the 46-year-old, Oxford University-educated Abhisit said he expected the election to bring stability regardless of who wins, and he doubted the poll would derail the Thai economy, Southeast Asia's second-biggest, which he believes could expand 3-5 percent this year.
He denied assertions by the red shirt protest movement that troops opened fire on unarmed civilians in the April and May unrest, and said he wanted a state investigation into the violence to be concluded "as quickly as possible."
"At no point did we send in soldiers or police to use firearms against peaceful protesters," he said.
A preliminary state investigation into the violence concluded that special forces positioned on an elevated railway track fired into the grounds of a Buddhist temple where several thousand protesters had taken refuge on May 19, according to a copy of the report viewed by Reuters in December.
Three of six people shot dead at the temple were probably killed by troops, the investigation found, contradicting statements by the military, which denied soldiers were responsible for the killings. That report has been passed to police for further investigation.
"The only incident where there is still mystery is the temple incident," Abhisit said. "I can't see the motive for the military or the soldiers to shoot into the temple."
"Buildings were set on fire and soldiers and police had to protect the fire engines," he added. "Whether those orders were executed without errors is something we need to investigate."
Most members of the red shirt group, who include many rural and urban poor, support ousted former populist premier Thaksin Shinawatra.
Thailand's three previous elections were dominated by parties allied with twice-elected Thaksin, a former telecommunications tycoon who was ousted in a 2006 military coup and lives in exile to avoid a jail sentence for corruption.
Many political analysts had expected the latest pro-Thaksin party, the opposition Puea Thai, which has broad support among the red shirts, to win the next election.
But that's no sure bet. The opposition is in disarray, beset by infighting, and smaller parties could get a boost from changes to electoral laws.
"The challenge for us is to get good candidates in seats where we haven't had MPs for some time in the north and northeast. But I am confident we can retain most of our seats, that we will make gains in the central region and make solid gains in the north," said Abhisit, whose term expires in December.
"A coalition government is the likeliest scenario," he said.
He said protests by the red shirts and another group, the ultra-nationalist yellow shirts who have withdrawn support for his government and are now seeking to topple him, have been peaceful and were unlikely to disrupt plans for elections.
The leader of the red shirt movement told Reuters on Wednesday it would respect the result of the election, provided the polls were fair.
Group leader Thida Tojirakarn also said she saw no reason for protracted protests, now that movement leaders detained after last year's violence had been released on bail this week.
The wild card for Thailand's economy, Abhisit said, remained inflation, especially from high oil and commodity prices, which he would like to see tackled by the Group of 20 major economies.
"It is an issue that we hope the G20 will discuss so that there is more coordination," he said.
He said Thailand's 83-year-old King Bhumibol Adulyadej, the world's longest-ruling monarch, appeared in good health when he visited him on Tuesday in the hospital where he has remained since being admitted on September 19, 2009.
The king's withdrawal from public view has raised concern in largely Buddhist Thailand, where many of his subjects regard him as almost divine.
"It is fine," Abhisit said of the king's health. "I had an audience with him last night for about an hour and a bit. He was engaged in conversations and very well aware of all the issues."
Editing by Alan Raybould and Robert Birsel