Thaksin Shinawatra was set to deliver a lecture in his new role as Cambodia's economic adviser today, amid tensions over Phnom Penh's refusal to extradite the fugitive former Thai premier.

The billionaire, ousted in a 2006 coup and living abroad to avoid jail for graft, planned also to visit the famed Angkor Wat temple and may play golf with Cambodian premier Hun Sen in the afternoon, said cabinet spokesperson Phay Siphan.

Cambodia outraged Thailand by refusing its request to extradite Thaksin Wednesday, saying the charges on which the ousted Thai leader had been sentenced in absentia to two years in prison were politically motivated.

NONE "Excellency Thaksin can come to Cambodia any time," Hun Sen said during a joint press conference with the ousted leader. "They (Thailand) degrade diplomatic relations, but we have no choice but to proceed."

Thaksin, slated to give a lecture to over 300 experts at the country's finance ministry on Thursday morning, has pledged to help Cambodians understand finance, reduce poverty and lure more foreign investment.

He has been warmly received by close ally Hun Sen, although Cambodian officials have said he will only stay in the country for two or three days and is not intending to live there.

When Thai diplomats handed over papers for Thaksin's extradition on Wednesday, Cambodian officials promptly handed them back a formal refusal letter.

Accused of offending the monarchy

In Bangkok, Thai Prime Minister Abhisit Vejjajiva condemned Cambodia's refusal to send Thaksin back, and said that he had halted aid programmes for the neighbouring country, which is still impoverished after decades of war.

NONE Tensions were already high between the two countries following a series of clashes over disputed territory near an ancient temple and the row threatens to mar a weekend summit of regional leaders with US President Barack Obama.

Thailand and Cambodia recalled their ambassadors last week as the quarrel escalated. Bangkok also put all talks and cooperation programmes on hold and tore up an oil and gas exploration deal signed during Thaksin's time in power.

Twice-elected Thaksin fled Thailand in August 2008, a month before a court sentenced him to two years in jail in a conflict of interest case. He had returned to Thailand just months earlier for the first time since the coup.

But he has retained huge influence in Thai politics by stirring up protests against the current government, and analysts said that in his close friend Hun Sen he had found a new way of pushing his campaign for a return to power.

Thailand's government upped the pressure on Thaksin this week by accusing him of offending the revered monarchy after he was quoted by the website of British newspaper The Times as calling for reform of royal institutions.

Defaming the monarchy, led by 81-year-old King Bhumibol Adulyadej, is a crime punishable by up to 15 years in jail in Thailand. The king has been in hospital since September with a lung and chest infection.

- AFP