Prime Minister Thaksin Shinawatra will release an open letter to Thai Rak Thai Party MPs and members in a bid to fend off criticism of his leadership style, Government Spokesman Surapong Suebwonglee said yesterday.

"The letter will explain the involvement of the prime minister's family in the sale of Shin shares, rebut the allegation of a conflict of interest and deny that the telecommunications law has benefited his family," Surapong said.

Thaksin is expected to reply to every charge raised against him and his family, he said. Following the letter's release, the government will finalise its decision to hold a series of public forums to explain the issues, he said, hinting that the pro-government rally scheduled for next Friday might be cancelled.

He dismissed speculation from former premier Suchinda Kraprayoon that a snap election may be held, explaining the situation did not warrant it.

"Under the circumstances, the government is fully functional and the prime minister can administer the country," he said.

He also dismissed rumours the government had already drafted a royal decree for a House dissolution.

Thaksin had said he wanted to clear up public misunderstanding triggered by a smear campaign against him.

"So much information [on the Shin Corp sell-off] has been distorted and I am the victim," he said.

Agriculture Minister Khunying Sudarat Keyuraphan called on government MPs from Bangkok to explain the relevant issues to their constituents.

Sudarat expressed confidence the anti-Thaksin sentiment would dissipate if the people could access the "facts".

PM's Office Minister Suranand Vejjajiva said the prime minister was looking forward to clearing his name in the joint House-Senate debate early next month.

"Rumours about a House dissolution and the prime minister's resignation are groundless. Thaksin is determined to explain himself in Parliament," he said.

About 60 government MPs from the Wang Phya Nak faction met with their leader Public Health Minister Pinij Charusombat to assess the situation.

"The meeting reached the conclusion that rural people remain in full support of Thaksin," said MP Ekkapap Pholsue.

Provincial leaders yesterday gathered at a Bangkok hotel to show support for Thaksin and denied they were gathering because the PM had increased their allowances.

Those present included Chon Buri Provincial Administrative Organisation president Pinyo Tanwiset, Kamnan and Village Head Association of Thailand president Paisal Prakarnrat and Tambon Administrative Organisation vice president Worayuth Chuaynarong.