BANGKOK, JUNE 11 -- Thailand's defense minister, Gen. Chavalit Yongchaiyudh, resigned today, threatening a government crisis and prompting rumors of possible military intervention.
Political sources said Prime Minister Chatichai Choonhavan was considering his political options after the powerful military closed ranks behind its former commander, who only joined the six-party coalition cabinet in late March.
The sources said Chatichai flew to the town of Hua Hin on the Gulf of Thailand during the evening to consult with King Bhumibol Adulyadej.
They said he still planned to leave as scheduled later for an eight-day visit to the United States. U.S. diplomats said they had no word from Chatichai that he might put the visit off. Chatichai's spokesman said, however, that the visit could be put off by one day if necessary. He has a meeting scheduled with President Bush on June 14.
Chavalit, 58, resigned after a buildup of tension following thinly veiled accusations of corruption against him and his wife by an outspoken member of the coalition.
The resignation shook the fast-developing country's business community. Prices plunged on the Securities Exchange of Thailand, with the main index falling about 40 points, or 4 percent.
Some businessmen believed Chatichai might be forced to reshuffle his government or even call a general election. In a country that has seen 15 coups and coup attempts since 1932, most diplomats and politicians still harbor misgivings about the firmness of democracy.
Thousands of soldiers in the capital and elsewhere staged rallies declaring support for Chavalit. Lt. Gen. Paiboon Hongsilark, commander of the 2nd Army responsible for northeastern Thailand, said: "We cannot stand for such insults and I will retaliate immediately. If they still do not stop, I cannot guarantee what will happen next."
In a two-paragraph statement read on the army-controlled Channel 5 television station, Chavalit gave no explicit reason for his decision. "Considering the present circumstances I have decided that I cannot join you to solve national problems as I had planned to do. I therefore decided to resign," it said.
His successor is the army commander, Gen. Suchinda Krapayoon.