Q+A - What's behind Cambodia's offer to give Thaksin a home?

By Martin Petty

BANGKOK, Oct 22 (Reuters) - Cambodian Prime Minister Hun Sen has offered to give asylum to fugitive former Thai premier Thaksin Shinawatra, his "eternal friend", a move likely to further strain ties between the two countries.

Hun Sen's offer will rile Thailand's shaky government as it hosts a summit this week of 16 Asia-Pacific leaders twice delayed due to political unrest that has plagued Southeast Asia's second-biggest economy for four years.

WHY HAS HUN SEN MADE THE OFFER TO THAKSIN?

The outspoken Cambodian premier has always got on well with Thaksin, an investor in his country's telecoms sector in the past and reported to be looking at new investments, including casinos.

He considers Thaksin to be a victim of a political vendetta and has made it clear he is not fond of Prime Minister Abhisit Vejjajiva's government.

Hun Sen is a wily politician who has often used the historical rivalry between the two countries to stoke nationalist fervour for his own gain. His offer to Thaksin will anger many Thais and thus score a few points for him at home.

A long dispute over the 11th century Preah Vihear temple has gained momentum under Abhisit's government and Hun Sen was not impressed when Thai Foreign Minister Kasit Piromya reportedly called him a "gangster". Kasit denies saying that.

HOW HAS THAILAND RESPONDED?

Keen to save face among his peers, Thai Deputy Prime Minister Suthep Thaugsuban, who has called Hun Sen a friend, played down the asylum offer and said the Cambodian premier had misunderstood Thailand's political situation.

But the government and Thaksin's opponents in the Thai establishment and military will be seething at the prospect of the billionaire running a political campaign from a neighbouring country.

Should Thaksin move to Cambodia, Thailand would probably seek his extradition to serve a two-year prison sentence he was given for graft. However, Cambodia and Thailand have no extradition treaty.

HOW WILL A MOVE TO CAMBODIA HELP THAKSIN?

Thaksin's strategy to wrestle back power after being ousted in a 2006 coup centres on the ballot box. His latest political party, Puea Thai, would probably win most votes when another election takes place.

Thaksin has mobilised his supporters in Puea Thai, which has mass rural support, and in an extra-parliamentary movement that is stepping up street protests to bring down Abhisit's government.

A base in Cambodia would let him use his vast wealth and mass support to coordinate his political campaign, making meetings with his henchmen easier and allowing him to stage public relations stunts in the vote-rich northeast bordering Cambodia.

HOW WOULD THIS AFFECT THAILAND'S POLITICAL CRISIS?

It could intensify the standoff, and the prospect of a pro-Thaksin party returning to power would prompt outrage among his opponents who have fought hard to keep him at bay.

Mass street protests and legal challenges against Thaksin and his allies would resume, further polarising the country, spooking investors and tourists and plunging Thailand into deeper uncertainty. Credit ratings could be downgraded.

WILL HUN SEN'S OFFER OVERSHADOW THE SUMMIT?

Hun Sen previously threatened boycotts over the temple dispute and has said he would arrive late in Hua Hin for the gathering of the Association of South East Asian Nations (ASEAN).

It is likely to take centre stage and further embarrass Thailand, whose presidency of the grouping has been fraught with problems. Diplomatic spats are common in ASEAN and the move could derail attempts to seek consensus on a number of issues.