Thailand’s government withdrew armed soldiers from skytrain stops in Bangkok and other key sites Wednesday as it lifted an eight-month-old state of emergency imposed when protesters overran the capital, sparking deadly violence.

The government announced, however, it will retain broad powers to detain suspects and impose order.

Prime Minister Abhisit Vejjajiva said Tuesday the government felt it no longer needed the sweeping controls imposed during April protests by the anti—government Red Shirt demonstrators, many of them supporters of exiled former Prime Minister Thaksin Shinawatra.

Protesters occupied Bangkok’s central tourist and shopping area for weeks in a camp fortified by bamboo barricades.

Clashes between protesters and soldiers killed more than 90 people, and the army finally cleared the demonstrators in May. Although the violence has subsided, the Red Shirt movement exposed a deep rich—poor divide in Thailand that remains unsolved.

The only outward sign of the removal of the emergency decree Wednesday was the absence of soldiers at some key Bangkok sites, including the city’s overhead railway stations.

Mr. Abhisit indicated Tuesday the government was still rattled by continuing political turmoil between pro— and anti—Thaksin camps that some feel could explode again into violence.

“Concerned security officials have to be able to monitor peace and order and be ready to handle any untoward incident,” Mr. Abhisit told reporters after meeting his Cabinet to revoke the state of emergency in Bangkok and three surrounding provinces.

Discontent has brewed for years, ever since protests were launched in 2006 accusing then—Prime Minister Thaksin Shinawatra of corruption and abuse of power.

The military ousted Mr. Thaksin in a September 2006 coup, but he remains popular with his mostly rural followers, who together with democracy activists formed the Red Shirt movement.

Occasional but growing protests in the capital have continued since the army cracked down on the Red Shirt encampment on May 19. Since then, authorities have used their emergency powers to arrest most of the main Red Shirt leaders and silence anti—government media.

Critics said the decree was selectively enforced and used to harass government opponents.

An estimated 10,000 Red Shirt protesters gathered peacefully in Bangkok on Sunday, and protest leaders have vowed to hold two monthly rallies in the New Year.

Deputy government spokesman Supachai Jaisamut said that recent rallies “were mainly symbolic” and the government did not expect more unrest.

A state of emergency was initially declared in April in Bangkok after demonstrators broke into the Parliament building to press their demands for early elections. It was later extended to cover almost one—third of the country’s 76 provinces, and has gradually been lifted in most locations except Bangkok and three surrounding provinces.

A state of emergency allows authorities to declare curfews, prohibit public gatherings, censor and ban publications, and detain suspects without charge for up to 30 days. Government officials acting under the decree cannot be investigated for wrongdoing or brought to court.

With the emergency decree lifted, the government will still retain extraordinary powers under the Internal Security Act, which Mr. Abhisit called “a normal security law.” Created in 2008 during simmering political unrest, the act allows authorities to hold suspects without charge for up to seven days. It also allows for curfews and restrictions on freedom of movement in situations deemed harmful to national security.

Government spokesman Panitan Wattanayagorn said the Cabinet agreed that “if the Internal Security Act is unable to handle the situation, the special (emergency) law will be enforced again.”

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