The billionaire former premier, and the driving force behind the government of his daughter Paetongtarn Shinawatra, skipped prison on his return in 2023 from 15 years of self-exile by serving his detention in hospital, on grounds of ill-health.
"There is already a crisis of confidence for the prime minister," said Wanwichit Boonprong, a lecturer in political science at Rangsit University.
An escalation in a border row with Cambodia has also rattled Paetongtarn's government, with Thailand's politically powerful military, which overthrew Shinawatra governments in 2006 and 2014, making its presence felt as nationalist rhetoric heats up.
A negative outcome in Thaksin's case and the border dispute would ratchet up the pressure on Pheu Thai, say analysts, both in the ruling coalition and among the public, as protest simmers.
"He has only expressed his thoughts and suggestions on the government's work," said Somkid, who is Paetongtarn's deputy secretary-general.
His case and the government's handling of various challenges have chipped away at public confidence, said Rangsiman Rome, a lawmaker of the opposition People's Party.
VIP TREATMENT
The 75-year-old spent just a few hours in jail before complaining of chest and heart problems and was transferred to the VIP wing of a hospital, prompting outrage and mockery from a public sceptical about the sudden deterioration of his health.
On Thursday, the Medical Council of Thailand will decide if three doctors who signed off on Thaksin's hospital stay should be punished for abusing their authority.
Despite not holding any formal position, Thaksin has cast a long shadow over the government, through meetings with foreign leaders, campaigning in local elections and weighing in on policy.
"He has a lot of influence on this government and it would hurt public confidence if the outcome of the case is negative," said Yuttaporn Issarachai, a political science expert at Sukhothai Thammathirat Open University.
The Pheu Thai administration is also grappling to keep the border dispute with Cambodia from spiralling out of control, as both sides have mobilised troops before talks between their militaries curbed rising tension set off by a recent skirmish.
"The prime minister has not been very firm in her statements, which raised questions by some about whether this government is actually protecting the interests of the country," Titipol said.
"The country now faces security issues and nationalism is on the rise at a time when government leadership is at its weakest," said Jatuporn Prompan, a Thaksin ally turned critic.
But Defence Minister Phumtham Wechayachai last week talked down such a possibility.
"The army has to do its duty," he told reporters. "There is no conflict with the government."
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