Thai Prime Minister Yingluck Shinawatra offered on Sunday to dissolve parliament and hold a referendum on the making of an unelected government in the face of persisted anti-government protests in the Thai capital.

In a statement broadcast by major TV channels, Yingluck said she might dissolve the House of Representatives and call a snap election within 60 days as well as hold the referendum regarding the demand of the anti-government protestors led by former deputy premier Suthep Thaugsuban.

The proposed referendum might be held to see if a majority of Thai people agree to the setting up of an unelected "people's council" promoted by Suthep and several former Democrat Party legislators who have organized the month-long street protest against Thaktsin regime.

The "people's council" would pick an unelected prime minister and cabinet to run the country instead of the elected one under Yingluck, according to Suthep.

"Such demands by the protestors appear to be an important issue which apparently lacks endorsement of the constitution. Yet, it may be decided upon in a public referendum by a majority of the Thai people who should have a say as to whether the making of an unelected prime minister or government should be set up or not.

"Nevertheless, such unelected regimes will adversely affect the image of the country in the world," Yingluck said.

She repeatedly said she might dissolve the lower house or step down if by doing so would pacify the protestors and return the aggravated situation to normal.

Suthep planned to have the protestors besiege Government House with intent to occupy it on Monday in a final showdown.

Policemen and army soldiers have been prepared to protect Government House from the planned invasion by the protestors, following last week's standoff which prompted the use of tear gas and water cannon by the police to disperse the demonstrators.

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