* Protesters have rejected early election called for Feb
* Protesters want to eradicate influence of ex-PM Thaksin
* Thaksin still the power behind govt from exile in Dubai (Updates throughout)
By Amy Sawitta Lefevre
BANGKOK, Jan 13 (Reuters) - Thousands of anti-government protesters set up blockades at several major intersections in Bangkok on Monday as they sought to cripple Thailand's capital, stepping up pressure on Prime Minister Yingluck Shinawatra to resign.
Police and soldiers kept watch as parts of the city of about 12 million people ground to a halt, but there were no signs that the government was preparing to resist the protesters with force.
The upheaval is the latest chapter in an eight-year conflict pitting Bangkok's middle class and royalist establishment against the mostly poorer, rural supporters of Yingluck and her self-exiled brother, billionaire former premier Thaksin Shinawatra.
Thaksin was ousted by the military in 2006 and sentenced to jail in absentia for abuse of power in 2008, but the one-time telecoms tycoon still looms large over Thai politics and is the dominant force behind his sister's administration from his home in Dubai.
Eight people, including two police officers, have been killed and scores wounded in violence between protesters, police and government supporters since the campaign against Yingluck's government started in November.
Shootings were reported overnight near a government administrative complex that protesters began to blockade late on Sunday and at the headquarters of the opposition Democrat Party, which has thrown in its lot with the protest movement.
Although city trains and river ferries were still operating, protesters set up barricades and encampments at seven critical road intersections, and others were being blocked too. Only motorcycles plied the city's main arteries.
At one junction, near the American and Japanese embassies, around 100 protesters sat on the road to halt traffic. Som Rodpai, 64, said they would leave after nightfall, amid fears their citywide protest could spark a violent reaction.
In a bid to end the agitation, Yingluck - who has a commanding majority in parliament - has called a snap election for Feb. 2 that her Puea Thai Party would probably win. Protest leader Suthep Thaugsuba has rejected the poll and the Election Commission has said the vote could be postponed to May 4.
"The first thing that the prime minister should do is to consider the proposal from the Election Commission," said Abhisit Vejjajiva, a former prime minister and leader of the opposition.
Suthep's stated goal is to eradicate the influence of the Shinawatra family on Thai politics, but he says he would call the protests off if, as some fear, civil war breaks out.
Pro-Thaksin groups started rallies in several provincial regions on Sunday but are steering clear of Bangkok for now.
The government has deployed 10,000 police to maintain law and order, along with 8,000 soldiers at government offices.
"We don't want confrontation with the protesters ... In some places we will let them into government buildings," Foreign Minister Surapong Tovichakchaikul said on Sunday.
"SIT AND MEDITATE"
National security chief Paradorn Pattanathabutr said around 20,000 protesters had joined a march from what has been the movement's main camp at Democracy Monument in the old quarter.
Among them was Prasert Tanyakiatpongsa, a small business owner, who backed Suthep's plans for electoral reforms.
"I'm not sure if we can achieve what we want in a day but maybe we can after a week ... We are not out to clash with police. We will sit and we will meditate," Prasert said.
Although rumours of a coup are rife, the military, which has staged or attempted 18 coups in 81 years of on-off democracy, has tried to stay neutral this time and army chief Prayuth Chan-ocha has publicly refused to take sides.
But some fear extremists or agents provocateurs could instigate violence to provoke military intervention, leading to a repeat of 2010 when more than 90 people, many of them Thaksin supporters, were killed in an army operation to put down a rally that had closed parts of central Bangkok for weeks.
"The government will let Suthep play the hero tomorrow ... It will be his show," Labour Minister Chalerm Yoobamrung said on Sunday. "There won't be a repeat of 2010 because the government will not use that strategy. There are no plans to use force."
The latest protests took off in November, when the government tried to push through a political amnesty that would have let Thaksin return home without serving jail time for corruption. The bill was ultimately withdrawn but the protests gathered pace.
Thaksin, who redrew Thailand's political map by courting rural voters to win back-to-back elections in 2001 and 2005, gained an unassailable mandate that he then used to advance the interests of major companies, including his own.
He is opposed by the elite and establishment, who feel threatened by his rise, and regard his sister as a puppet. Thaksin's opponents include some academics who see him as a corrupt rights abuser, and the urban middle class who resent, as they see it, their taxes being used for his political war chest.
A smooth election next month looks increasingly unlikely, with the protesters determined to install an appointed "people's council" to change the electoral system and bring in other reforms to weaken Thaksin's sway.
The unrest has hurt tourism and further delayed huge infrastructure projects that had been expected to support the economy this year at a time when exports remain weak. Consumer confidence is at a two-year low.
The central bank, finance ministry and some other ministries have moved operations to buildings around the city or even in neighbouring provinces.
"The aim is not war ... We have to keep pressure on the government until it is crippled and cannot function," Kasit Piromya, a former foreign minister and member of the opposition who joined Monday's protests, told Reuters.
Protest leaders say they will not shut down public transport or Bangkok's airports. Anti-Thaksin protesters shut the airports for days in late 2008, causing chaos for tourists and exporters. (Writing by John Chalmers; Editing by Alan Raybould and Raju Gopalakrishnan)
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