Deputy Prime Minister Suwit Khunkitti pulled his Puea Pandin party and 24 MPs out of the ruling coalition late on Tuesday in protest against what he called the misguided priorities of the government.
"The party will withdraw from the coalition government. We have given the government a chance to make changes," he told a hastily called press conference.
Government spokesmen said the withdrawal would not affect plans to reshuffle the government and submit a new list of ministers for royal approval on Wednesday.
In addition to Mr Suwit, Puea Pandin has two cabinet members of the Samak I administration: Information and Communication Technology Minister Mun Pattanothai and Deputy Finance Minister Ranongrak Suwanchawee.
The Puea Pandin Party leader said he had submitted his party's letter to notify Prime Minister Samak Sundaravej of its decision to pull out of the coalition government at about noon Tuesday.
Chart Thai Party advisory chief Sanan Khachornprasart called Mr Suwit's decision "appalling," and said he would consult ex-premier and party leder Banharn Silpa-acha. Chart Thai and Puea Pandin supposedly had a deal to act as partners on any major decisions, and Maj Gen Sanan indicated he felt Mr Suwit had back-stabbed.
In the short term, the loss of Puea Pandin and its leader should not affect the ability of Prime Minister Samak Sundaravej to govern. The premier will still have a majority in the Lower House, and there will be no vote of confidence until next year, barring a major political emergency.
But the withdrawal of Mr Suwit, a key cabinet member who also was industry minister, is another mini-crisis added to unending street protests, the loss of three cabinet ministers to malfeasance charges and the decision by the Supreme Court on Monday to prosecutge 42 members of former Thaksin governments on criminal charges, including three sitting cabinet members.
"We are concerned about the charter amendments," said Mr Suwit, apparently staking out an opposition agenda. "We have said that the amendment of the constitution is less important then people's day-to-day problems."
Mr Suwit also cited what he claimed were his party's concerns over the Preah Vihear temple. "The party is not satisfied with the government's decisions on the temple issue," he said - although he did not detail either his objections or what policy he favoured.
Puea Pandin was the third-biggest among the five political parties backing the ruling People Power party headed by Mr Samak. Mr Suwit is a veteran politician and financier.
The party joins the Democrats, until now the only opposition party, on the other side of the parliamentary aisle.
Mr Samak has promised a major cabinet shakeup involving "more than 10 positions:" in coming days. It is widely expected he will bring in non-politicians to help, particularly with the economic posts, including Mr Suwit's industry minister post.
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