Thailand's premier called a snap election to try to defuse the kingdom's political crisis, but protesters vowed to keep up their "people's revolution" as an estimated 140,000 demonstrators flooded the streets of Bangkok.
Prime Minister Yingluck Shinawatra has faced more than a month of sometimes-violent rallies by protesters storming key state buildings in a bid to unseat her government and replace it with an unelected "People's Council".
By dissolving parliament and calling a new election that her party is likely to win, the embattled premier aims to cool public anger without bowing to the demonstrators' demands to suspend the country's democratic system.
Protest leaders, however, said they were not satisfied and pledged to rid Thailand of the influence of her older brother Thaksin Shinawatra, a tycoon-turned-premier who was ousted by royalist generals in a coup seven years ago and lives overseas.
Addressing a cheering crowd from a newly-erected stage near the government headquarters, protest leader Suthep Thaugsuban announced plans to set up a parallel government.
"We will select a people's prime minister and set up a government of the people and a people's assembly to replace parliament," said Suthep, who faces an arrest warrant for insurrection.
Suthep envisioned a body that could redraft the kingdom's laws in preparation for an eventual election after at least eight months.
He later told supporters to stay on the streets for three more days and issued an ultimatum calling on Yingluck and her colleagues to resign from the caretaker government - although he did not specify the penalty for non-compliance.
The political conflict broadly pits a Bangkok-based middle class and royalist elite backed by the military against rural and working-class voters loyal to Thaksin.
His overthrow in 2006 by generals loyal to the king ushered in years of political turmoil and rival street protests by the royalist "Yellow Shirts" and Thaksin's supporters, known as the "Red Shirts".
Thaksin - who once described Yingluck as his "clone" - is widely considered the de facto leader of the ruling party, angering his foes.
Pro-Thaksin parties have won every election in more than a decade, while the opposition Democrat Party - whose MPs resigned en masse Sunday because they could not achieve anything in parliament - has not won an elected majority in about two decades.
"If this government is deposed, it will be an outcome of a so-called 'people's coup' by the electoral minority," said Thailand expert Thitinan Pongsudhirak.
"We will see more polarisation - and the makings of a prolonged civil conflict," added Thitinan, director of the Institute of Security and International Studies at Bangkok's Chulalongkorn University.
Dozens of people were killed in a military crackdown on mass pro-Thaksin Red Shirt rallies in Bangkok three years ago against the previous government.
If Yingluck is overthrown, "we will see most likely the return of the Red Shirts to Bangkok and when they unleash their wrath this time it will be much more cataclysmic than what we saw in the uprising in 2009-2010," Thitinan said.
Democrat Party officials said Monday they had not yet decided whether to take part in the upcoming election, which must be held within 60 days of the house's dissolution.
'We don't want any more elections'
Around 140,000 people were estimated to have joined the protests, according to the government's Centre for the Administration of Peace and Order, which was set up to deal with the unrest.
"We don't want politics any more - no elections. Only the protesters can choose the next government. We choose, then the king appoints them," said one demonstrator who did not want to be named.
Yingluck's Puea Thai party said she was likely to be its candidate for prime minister again in the upcoming election, which is due to be held on February 2.
Tensions remain high after several days of street clashes last week when police used tear gas, water cannon and rubber bullets against rock-throwing demonstrators.
The unrest has left five people dead and more than 200 injured. Authorities have said they would try to avoid fresh confrontation and there were no reports of violence by early evening.
The demonstrations were triggered by an amnesty bill, since dropped by Yingluck's ruling party, which opponents feared would have cleared the way for Thaksin's return.
The former premier went into exile in 2008 to avoid jail for a corruption conviction which he says was politically motivated.