For a country that has had no effective government since February, Thailand has shown remarkable economic resilience. Although weakened confidence has dampened domestic consumption and investment, growth is still set to exceed 4 per cent this year, thanks to buoyant exports. But the latest twist in Thailand's extended political crisis is putting that precarious stability – and future national prosperity – at risk.

The running battle between Thaksin Shinawatra, the billionaire prime minister, and his political foes has spilled over into an ugly brawl over foreign investment. It was triggered by opposition Democrats' claims that last January's sale to Temasek, Singapore's state investment group, of the Thaksin family's 49 per cent stake in Thailand's biggest telecoms company broke the law. Thailand's commerce ministry has responded by also investigating 16 local affiliates of multinational companies on similar grounds. It is widely believed that the expanded inquiry has been prompted by Mr Thaksin's supporters, who hope to distract attention from his family's affairs.