Thaksin Shinawatra (file)

The Thai cabinet has partially lifted a ban on political activity in the country, a key step toward restoring democracy. The decision took some political observers by surprise and comes less than a week after a constitutional tribunal banned the party of former Prime Minister Thaksin Shinawatra. Ron Corben reports from Bangkok.

The decision allows existing political parties to resume their operations, which were banned after last year's military coup.

Political analysts say Tuesday's move is a big step toward holding elections later this year.

However, members of the party led by ousted Prime Minister Thaksin Shinawatra can not return to politics until after the National Legislative Assembly passes a law allowing them to form new parties. That could take months.

Last week a constitutional tribunal dissolved his Thai Rak Thai Party, and barred Mr. Thaksin and other party officials from politics for five years over charges of fraud in last year's election.

Democrat Party leader Abhisit Vejjajiva holds a book about the constitution court verdict on his party during a promotion of the book in Bangkok, Thailand Tuesday, 5 June 2007

The tribunal cleared Thailand's second largest party, the Democrat Party, of bribery charges related to its efforts to get politicians to boycott elections last year.

Democrat Party spokesman Ongart Klampaiboon welcomed Tuesday's decision, which he said was a surprise.

"This is quite an important step to look ahead to the future. We should have the democratic atmosphere in our society if we plan top have an election before the end of the year," Ongart says.

Panitan Wattanayagorn, a political scientist at Chulalongkorn University, says the Cabinet's move reflects the public desire for political flexibility.

"The public also wants to see some kind of reconciliation in the political process - although they indicated that they're still very much committed to the verdict of the Constitutional Tribunal to clean up the Thai political system," Panitan says.

Panitan says the next major test will come with a referendum on a new constitution due within months. If passed, the way would be open for general elections, which the government says will be held by December.

Political analysts say that if the new constitution is accepted quickly, elections could be held earlier if the political climate remains calm.