When Tassaporn Ratawongsa, a 42-year-old radiologist arrived for work at a private Bangkok hospital recently, she expected to see her patients.

Instead, she was greeted by police who arrested her, searched her apartment and copied her laptop's contents. Her alleged crime: Inputting into a computer system false information that undermines national security and causes public panic.

She was the fourth person accused of spreading rumors about the health of Thailand's revered monarch, King Bhumibol Adulyadej, that sent stock prices tumbling in mid-October.

The arrests threw a spotlight on Thailand's Computer Crime Act, a controversial and wide-ranging law passed by a military-installed legislature following a 2006 coup.

Authorities say it is meant to close legal loopholes and tackle crimes in cyberspace. Critics label it a witch hunt law against political dissidents with provisions so vague they could be used against any web surfer.

Both sides agree it limits discussion about the country's 82-year-old monarch, who has been in hospital for nearly three months for what the palace describes as recovery from lung inflammation.

Foreign news reports on the stock slide were met with strong criticism by conservative media outlets and calls for the prosecution of rumor mongers by authorities.

While Thais revere the king, the world's longest-serving monarch, there is significant uncertainty about what lies ahead in politically divided Thailand when the reign of the only unifying figure and respected arbitrator comes to an end.

Violent street riots, mob takeovers of airports, the coup and an assassination attempt over the past three years have been vivid signals of the mounting tension between supporters and opponents of former premier Thaksin Shinawatra, who was toppled in 2006.

Analysts say the crackdown on free speech in part reflects fear of Thaksin and his supporters, some of whom are accused of harboring a republican agenda, which they deny.

What is most striking about the use of the law is the government's simple-minded emphasis on choking off expression and its failure to offer any serious vision for a contemporary information order, said Michael Montesano of Singapore's Institute of Southeast Asian Studies.

'WAR ROOM'

Since 2007, Thai authorities have blocked almost 20,000 Web pages deemed insulting to the monarch, said Aree Jiworarak, head of Thailand's information technology supervision office.

His war room, staffed around the clock by a team of bilingual civil servants and young professionals, tackles systematic attempts to undermine the throne, Aree said.

Court approval is needed to shut most websites. But for those offensive to the monarchy, his office approaches Internet Service Providers to block access before getting an official court order.

About 100 such pages are found a day, he said.

It is not just about national security. It's about the hurt feelings among Thai people. Service providers cooperate because they love the country, too, Aree said.

However, critics say providers have another reason to work with authorities: the law could subject them to the same punishment unless they cooperate.

While authorities say the law is necessary to establish a safe cyber-environment, critics say it does just the opposite.

It is creating fear that 'Big Brother' is watching, said Chiranuch Premchaiporn, who was arrested after a reader posted a comment allegedly critical of the monarchy on the Prachatai Webboard she facilitates. Police said she failed to delete it promptly.

We still don't know how authorities get access to IP addresses of these people arrested because they did not ask webmasters, she said.

INVESTOR CONFIDENCE

Sawatree Suksri, a lecturer at the law faculty at Thammasat University, said the law is ambiguous on several points, especially the use of terms national security and public panic which are subject to interpretation.

Other analysts say the clampdown is reducing the space for public debate and hurting investors' confidence in Thailand's $260 billion economy, Southeast Asia's second biggest.

Investors who were previously unaware of the intensity of debate over Thailand's future have quite noticeably begun to voice increasing concern, added Montesano, a visiting research fellow at ISEAS in Singapore.

These arrests are likely to reinforce this trend.

Because the throne is traditionally sacrosanct and open discussion of the monarchy is limited by lese majeste laws, which carry a maximum penalty of 15 years in prison, mainstream media has largely practiced self-censorship.

But policing the often-anonymous world of the Internet is far more difficult. Chiranuch, of Prachatai, said fear of prosecution may lead some surfers to consider disguising their identities or altering their IP address when visiting political webboards.

Some rights groups said the use of the computer law may have gained prominence recently because authorities may be less inclined to use its harsh lese majeste laws on web surfers.

The computer law may be used for the prosecution of any type of thought crime on the disingenuous pretext that the crime is one of technology rather than one of expression or of ideas, said private watchdog the Asian Human Rights Commission.

But police say it is crucial and effective.

We don't want to have to invoke his majesty to prosecute cases which obviously threaten national security, said Police Lt. Gen Tha-ngai Prasjaksattru, head of the Criminal Investigation Bureau.

We don't need to say it's libel because we have a law that says spreading lies online is a crime.

(Editing by Jason Szep)