The Internal Security Act turn violent.
"Based on information we have received, there are many groups of protesters and some may attempt to use violent means," Deputy Prime Minister Suthep Thaugsuban said following a meeting with top security officials, adding that violent acts may include bombings and seizure of government offices.
The ISA, to be formally invoked after a weekly cabinet meeting on Tuesday, would be imposed from March 11 to March 23 in Bangkok and surrounding areas, where anti-government protesters plan to rally to press for new elections.
Following the decision to use the ISA, Prime Minister Abhisit Vejjajiva cancelled his planned March 13-17 visit to Australia, a spokesman said, without elaborating.
Thaksin's red-shirted supporters plan to kick off their rallies in the provinces on March 12 before moving to Bangkok on March 14, merging in the historic heart of the capital.
The UDD has said it would rally peacefully for at least seven days in what has been dubbed "a million-man march," although analysts doubt the group can mobilise that number.
POTENTIAL PARALYSIS
However, even a smaller number could paralyse the capital, with the UDD promising tens of thousands of pickup trucks and tractor-drawn carts will descend on the city.
Protesters brought traffic in parts of Bangkok to a standstill for days in April 2009, occupying major intersections and sparking Thailand's worst political violence in 17 years. The riots were quelled by the army.
Since then, the group has held peaceful rallies in Bangkok and elsewhere. The special security law has been pre-emptively invoked on seven occasions but no restrictions put in place.
After two unprecedented election victories, Thaksin was ousted by the military in 2006 and fled into exile before being convicted on graft charges in his absence and sentenced to two years in prison.
The Supreme Court on February 26 confiscated $1.4 billion of his wealth for abusing his power to boost his family's business interests.
The government and its supporters have been criticised for using scare tactics ahead of the upcoming rally, repeatedly warning of violence or sabotage by the UDD.
Ministers have made frequent and vague comments about huge sums of money transferred into Thai bank accounts to fund violence and on Sunday said weapons and ammunition had been stolen from an armoury in Phattalung province, 840 km south of Bangkok.
Government spokesman Panitan Wattanayagorn said an undisclosed number of rifles, pistols, and hand grenades were missing since Tuesday, and authorities were tracking whether the weapons have been sent to Bangkok to be used during the protest.
Separately, an aide to a rogue army major-general allied with Thaksin, Khattiya Sawasdipol, who has travelled to Dubai several times in recent weeks to meet the ex-prime minister, has been held in police custody since Saturday.
He is being detained for harbouring a close aide who is accused of seeking to instigate unrest by appearing in a video clip, posted on the Internet, predicting bomb attacks in Bangkok.
Last Saturday, two grenades exploded at branches of Bangkok Bank Pcl, causing slight damage. Police have since arrested two suspects.