The ruling was made at yesterday's meeting chaired by Justice Minister Charnchai Likhitjittha after the arrest of Kim Nielson and a gang member on charges of racketeering. Their case has been forwarded to the public prosecutors.

The DSI is planning to arrest those who encroach on forest land and state officials who conspired to issue land title deeds on forest reserves.

A consultant firm was found to be the key player in the scam.

The firm operates by registering companies with foreigners holding 49 per cent in the company and Thais - who are the firm's employees - 51 per cent. However, the firm exploits legal loopholes by allowing foreigners to hold "preferred shares" and are entitled to a bigger vote than are the Thai shareholders. The foreign shareholders, therefore, have control over the company and can buy land in tourist-oriented areas like Koh Samui, Phuket and Chiang Mai.

Scandinavian police tipped off Thai police that foreign mafia members had become owners of major real estate and resorts in tourist towns. The consultancy had billions of baht transferred into their account and then helped its clients who wanted to buy land avoid paying taxes through legal concealment.

Banharn warns of Thaksin's return

Chat Thai Party leader Banharn Silapa-archa yesterday urged the current government to speed up its work before the public lost faith in it. "I'm afraid the old regime [of deposed Premier Thaksin Shinawatra] will come back if this government still fails to produce good results," he said.

The government should take seriously surveys showing its popularity plunging, or else it will face a tough time in the next few months, he said.

Government Spokesman Yongyuth Mayalarp blamed Thaksin's economic policies for ruining the country and leaving a huge burden for the Surayud government to labour through.