By Grant Peck, The Associated Press

BANGKOK, Thailand - Thailand recalled its ambassador from neighbouring Cambodia on Thursday after former Thai Prime Minister Thaksin Shinawatra, a fugitive from justice, was named an adviser to the government in Phnom Penh.

The move was the most severe diplomatic action thus far in ongoing tensions between the two countries, which have had a series of small, but sometimes deadly, skirmishes over the demarcation of their border.

Thailand also said it would review all of its agreements with Cambodia.

Thaksin is a hugely divisive figure in Thailand, where his supporters and opponents have repeatedly taken to the streets over the past two years in demonstrations over who has the right to rule the country since Thaksin's ouster in a 2006 military coup. The protests have sometimes turned violent and once shut down the capital's airports for a week.

Thaksin has been living mostly in self-imposed exile since the coup, when he was accused of corruption, abuse of power and insulting Thailand's constitutional monarch, King Bhumibol Adulyadej. He was convicted in absentia last year of violating a conflict of interest law and sentenced to two years in prison, and his Thai passport has been revoked, forcing him to travel on other countries' passports.

Thai officials frequently claim he is trying to undermine the current government.

His supporters say the Bangkok-centered elite is ignoring the mandate Thaksin won in two democratic elections because it feels its own privileges are threatened.

A Thai Foreign Ministry statement said Thursday that the Thai ambassador was being recalled in response to the announcement of the appointment a day earlier by Prime Minister Hun Sen's government.

Cambodian state television said Wednesday night that Thaksin would serve as an adviser on economic affairs to both the government and to Hun Sen personally.

It also said Cambodia would refuse to extradite Thaksin to Thailand if asked because Phnom Penh considers him a victim of political persecution, echoing comments Hun Sen made at an Asian summit last month.

Thai Prime Minister Abhisit Vejjajiva told reporters Thursday that the Cambodian action was considered interference in Thailand's internal affairs.

Thaksin, a former telecommunications tycoon, had substantial business interests in Cambodia and was accused of pursuing special deals there for his family-controlled conglomerate while prime minister.

He has travelled since the coup to Dubai, Hong Kong, Nicaragua, Liberia and Montenegro in pursuit of investment opportunities.

Thaksin remains widely popular among Thailand's rural people and the urban poor, who benefited from his social welfare policies. He is still highly influential, rallying protesters in telephoned speeches from aboard.