Opponents of ousted Thai premier Thaksin Shinawatra said on Thursday they could take to the streets if the government led by his sister tried to push through an amnesty that would let him return from exile a free man.

The government refused to confirm there was any such plan and Thaksin himself played down the idea from his home in Dubai, where he chooses to live rather than return to serve a two-year prison sentence for abuse of power.

Thaksin was ousted by the military in 2006. He remains a central figure in Thailand's six-year political crisis, adored by the poor in the towns and countryside but reviled by the Bangkok middle classes and the royalist establishment.

The People's Alliance for Democracy (PAD), whose yellow shirt supporters undermined Thaksin's government with massive street rallies before the military coup, said the reported amnesty would let Thaksin off scot-free.

We have said that we will stage a rally if there's an amnesty for Thaksin, spokesman Panthep Pongpuapan said, adding the extra-parliamentary PAD would probably meet late next week to decide on any action.

According to Thai media, ministers have discussed a general amnesty that seems designed to allow Thaksin to return home.

The cabinet proposals, which would be sent to King Bhumibol Adulyadej to be endorsed for an amnesty or a royal pardon around his birthday on December 5, would cover people over 60 years of age with less than three years in prison to serve.

Thaksin, 62, was convicted of abuse of power in 2008 and fled before a two-year sentence was handed down. He never spent time in jail.

Some eligibility criteria change from one amnesty to another, but those convicted of corruption, which might apply to Thaksin, or drug offences are normally not freed. The Bangkok Post daily said the draft amnesty this time did not exclude corruption.

The matter was discussed at a cabinet meeting on Tuesday, media said, but no mention was made of it in a statement issued by the government. Officials were asked to leave the meeting when the amnesty was discussed by ministers, the reports said.

Besides the hush-hush manner in which the cabinet has endorsed this amnesty decree, the timing is also seen as highly inappropriate -- the administration is sneaking in a decree to help Thaksin at a time when everyone else is busy fighting the misery caused by the enormous flood crisis, the Post said in an editorial on Thursday.

The worst floods in over 50 years have killed 567 people since July and a quarter of the country is still under water.

Such an insensitive move unnecessarily invites political uproar and could sour the current atmosphere of reconciliation and cooperation, which has brought together people of different political colours to work as a unified force to help the country through this calamity, the Post said.

NOTHING ILLEGAL

Prime Minister Yingluck Shinawatra, who has faced criticism for lack of coordination and indecision during the crisis, was not present at Tuesday's cabinet meeting, having been delayed in a province she was visiting to inspect flood damage.

The meeting was chaired by Deputy Prime Minister Chalerm Yubamrung. Asked by reporters on Thursday if an amnesty had been designed with Thaksin in mind, he replied: The government has not done anything illegal and has not done it for any single person.

Questioned by the opposition in parliament, he declined to go into detail but said Thaksin's conviction in 2008 was not for corruption. He had been found guilty of helping his ex-wife buy prime land in Bangkok from a state agency while in power.

PAD spokesman Panthep said those who received a royal pardon normally had to accept their guilt by spending some time in prison. Thaksin must get a penalty, he said.

Yingluck had just three months of political experience before leading Puea Thai Party to an election landslide on July 3 with a promise to revive Thaksin's populist policies. From the start, critics said she had been installed by Thaksin to help bring him home a free man.

Late on Wednesday, Thaksin told Reuters in Dubai that the cabinet was discussing a pardon that took place every year, not some special amnesty.

Asked by Reuters if he thought he would be included, he said: I don't know. I don't think so. No one knows, because it was a confidential meeting. It's at the full discretion of his majesty (the king).

Participants on panthip.com, a popular social forum, attacked Yingluck's government for focussing on Thaksin at a time of national crisis.

The government has failed to administer the country. People are in trouble but their priority is helping her brother, one contributor, Kaeng Chumsaen, said.

Another, who went by the name of Palangjit, said: If the government wants to survive, don't go ahead with this plan.

(Additional reporting by Jutarat Skulpichetrat, Martin Petty and Viparat Jantraprap; Writing by Alan Raybould; Editing by Sugita Katyal)