The Thai government is striking where it believes Cambodia will feel it most by cancelling talks on the disputed maritime boundary in the Gulf of Thailand, a government source says.
The move comes in retaliation for Phnom Penh's decision to appoint ousted prime minister Thaksin Shinawatra as an economic adviser, the source said.
The government, with full backing from Prime Minister Abhisit Vejjajiva, recalled Thai ambassador to Cambodia Prasas Prasasvinitchai and reviewed all agreements and cooperation with the neighbouring country.
It is the second time in seven years Thailand has recalled its ambassador from the Cambodian capital.
The previous time was in 2003 in protest against its embassy being burned by Cambodian protesters.
The move to freeze the maritime talks followed the announcement by Phnom Penh on Wednesday of the appointment of Thaksin as a personal adviser to Cambodian Prime Minister Hun Sen and economic adviser to his administration.
"Any action taken by the Royal Thai Government is to make it known to the Royal Government of Cambodia the resentment of the Thai people," a Thai government statement said.
Thailand has made clear to Cambodia on "several occasions that bilateral relations between the two countries should take precedence over any personal relationship", the statement said.
The retaliation measures did not cover loans allocated to Cambodia, according to Chavanond Intarakomalyasut, secretary to the foreign minister.
Thailand believed Hun Sen was banking on Thaksin's return to power to quickly convert the idea for the two countries to jointly develop the disputed maritime territory in the Gulf of Thailand, rich in natural gas and oil, into practice.
The main target of the Thai measures was to put the negotiations on the issue on hold to express Thailand's displeasure, the source said.
Mr Chavanond confirmed the memorandum of understanding to settle the dispute over the area was among agreements which would be reviewed.
"We have to assess reasons behind the Cambodian government's present position towards Thailand," he said.
"Is the problem now due to misunderstanding or personal interests?"
Cambodian Deputy Prime Minister Sok An told a news conference in Phnom Penh Cambodian ambassador to Thailand You Aye would leave Bangkok in response to the Thai move to recall its envoy.
"When the Royal Thai Government resumes the mission of their ambassador to Cambodia, then the Cambodian government will decide to send back our ambassador to Bangkok to continue the mission as normal," Sok An said.
"This is a reciprocal action to the decision by Thailand," he said, adding it would not affect relations, "especially in relation to the people living along the two borders".
The spat took place a day before the Thai and Cambodian premiers will join other leaders of the Mekong subregion at a summit with Japan starting today. But the two have no plans to meet each other to mend fences.
Mr Abhisit said Cambodia's decision to appoint Thaksin was a "thumbing of its nose" at the Thai judicial process and this could hurt the feelings of Thai people.
The statement announcing the appointment of Thaksin, which was read on Cambodian state television on Wednesday, said charges against Thaksin were "politically motivated".
However, the government will make sure measures to respond to Cambodia will not have any adverse consequences on the relations between people of the two neighbouring countries, the prime minister said. Mr Abhisit said he believed Thai people and Cambodian people wanted to be good neighbours.
Deputy Prime Minister Suthep Thaugsuban reiterated that if there was proof Thaksin had settled in Cambodia, the government would take legal steps to have him extradited.
Acting government spokesman Panitan Wattanayagorn said the appointment of Thaksin showed Cambodia had rejected Thailand's goodwill and its statement had amounted to an act of interference in Thailand's internal affairs.
A government official familiar with ties with Cambodia, however, was worried about the Thai measures in retaliation to Phnom Penh, which could pose a long-term strain.
"I think they are too harsh," said the official, who requested anonymity.
Former foreign minister Tej Bunnag said the situation would not be conducive to the two countries resolving long-standing border problems.
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