Embattled Thai PM faces call to step down to avert coalition revolt

BANGKOK, June 20 (Reuters): Thailand's embattled Prime Minister Paetongtarn Shinawatra faced the prospect of losing her government's majority on Friday, as a vital coalition partner looked set to demand her resignation and senators launched a legal bid to remove her from office.

Paetongtarn, the politically inexperienced daughter of divisive tycoon and former premier Thaksin Shinawatra, is fighting fires on multiple fronts, struggling to breathe life into a stagnant economy facing steep US tariffs and under pressure to take a tougher stand on a territorial row with Cambodia that has seen their troops mobilise at the border.

The United Thai Nation party, the second-largest partner in her alliance, will demand Paetongtarn, 38, step down as a condition for it to remain in the Pheu Thai Party-led coalition, two UTN sources told Reuters, requesting anonymity because they were not authorised to speak to media.

"If she doesn't resign, the party would leave the government," one source said. "We want the party leader to tell the PM as a courtesy."

Though Paetongtarn received a boost on Friday with another coalition partner, the Democrat Party, pledging its support, Thailand's youngest premier is still in an untenable position, with her majority hinging on UTN staying in the alliance following Wednesday's exit by the larger Bhumjaithai Party.

It is unclear when UTN will announce its position and a spokesperson said the party would wait for its leader to inform the prime minister of its decision.

Reflecting concerns in financial markets, the Thai baht weakened for a fifth consecutive session on Friday and was on course to log its worst week in four months.

Paetongtarn's battle to stay in power demonstrates the declining strength of Pheu Thai, the populist juggernaut of the billionaire Shinawatra family that has dominated Thai elections since 2001, enduring military coups and court rulings that have toppled multiple governments and prime ministers.

But Paetongtarn is facing domestic anger and the prospect of an internal revolt over Wednesday's embarrassing leak of a phone call between her and Cambodia's influential former leader Hun Sen - once seen as a Shinawatra family ally - which her critics say posed a threat to Thailand's sovereignty and integrity.