Thailand’s Constitutional Court yesterday removed the elected Prime Minister, Yingluck Shinawatra, and almost a third of her cabinet ministers for “abuse of power.” The anti-democratic ruling follows months of anti-government protests and legal chicanery aimed at installing an unelected “people’s council”—essentially a dictatorship backed by the military.

Yingluck’s supposed crime was to transfer National Security Council chief Thawil Pliensri to another role in 2011 so that his place could be taken by Preiwpan Damapong, a former brother-in-law of Yingluck’s brother, ex-Prime Minister Thaksin Shinawatra. The nine cabinet ministers were removed for endorsing the transfer.

The court admitted that Yingluck was within her rights to transfer Thawil, but asserted the decision was taken with a “hidden agenda” and not in accordance with “moral principle.”

Yingluck’s removal was denounced by legal experts. Ekachai Chainuvati, deputy dean of law at Siam University in Bangkok, told the New York Timesthe ruling was “total nonsense in a democratic society” and an example of “what I would call a juristocracy—a system of government governed by judges.”

The ruling follows the court’s decision in March to annul the February 2 election, which the ruling Pheu Thai Party undoubtedly won, on the pretext that voting was disrupted by anti-government protesters from the People’s Democratic Reform Committee (PDRC). The PDRC, supported by the opposition Democrat Party, has occupied government buildings and blockaded Bangkok streets since November to oust the ruling Pheu Thai Party.

The PDRC is supported by much of the state bureaucracy and powerful sections of big business, as well as the courts. It represents the interests of Thailand’s traditional elites, the military and the monarchy, who supported the 2006 coup against telecom billionaire Thaksin Shinawatra. These layers of the ruling class view Thaksin and Yingluck as upstarts, who cut across their own interests by opening the country to more foreign investment and introducing limited social reforms, such as cheap healthcare and subsidies for rice farmers. These measures gained the Shinawatras a base of support among the country’s urban and rural poor.

During the past eight years of bitter political infighting, the Constitutional Court has played a key role supporting the country’s traditional elites. After the military overthrew Thaksin, the court dissolved his Thai Rak Thai Party. In 2008 it removed two prime ministers from the elected pro-Thaksin People’s Power Party and then dissolved the party altogether, leading to the installation of the Democrats, backed by the military.

Following yesterday’s ruling, the PDRC called a rally for Friday, described by its leader Suthep Thaugsuban as the “final all-out battle” to overthrow the rest of the government. The Democrats demanded the resignation of the remaining cabinet ministers.

The Pheu Thai Party remains in office, although its hold on power is extremely tenuous. Yingluck protested her innocence following the court’s verdict, but did not challenge its legitimacy. Pheu Thai legal expert Bhokin Bhalakula denounced the ruling as a “new form of coup” and urged the government’s supporters to “assemble, petition, file complaints and take legal action” against the court. According to the Bangkok Post, however, the party’s secretary-general Phumtham Wechayachai “took a more positive spin, saying it was good that the court had not removed the entire cabinet.”

Yingluck’s deputy, Niwatthamrong Boonsongphaisan, a former business associate of Thaksin, has taken over as caretaker prime minister. A new election is scheduled for July 20, but even if it goes ahead the Democrats are likely to boycott the poll and the PDRC has promised to disrupt it—which would pave the way for the Constitutional Court to annul the result again.

The government could be removed before the election. The National Anti-Corruption Commission (NACC)—another pro-opposition body—could rule as early as today to indict Yingluck on trumped-up charges that she “neglected her duty” by allowing losses linked to the rice subsidy scheme. Niwatthamrong could also face suspension because as commerce minister he helped set up the scheme.

In a separate case, the NACC has accused 308 lawmakers of breaking the law by trying to amend the constitution to make the Senate a fully elected body. Last week the NACC said it had found a “prima facie” case against 36 Senators who supported the law change. If found guilty, they could be banned from politics.

According to the Bangkok Post, many of the lower house MPs facing possible action by the NACC are seen as “likely leaders of a Pheu Thai Party campaign when a new election is called, with many also being groomed for leadership roles.”

The Post reported today that the military has not ruled out directly intervening through a coup. An unnamed army commander said the generals were monitoring political developments “on a day-to-day basis.” He added: “Events will let us know if a coup is necessary, so we stand ready for any situation.” This echoes previous statements by Army Chief General Prayuth Chan-ocha that the army will intervene if violence erupts between the PDRC and the pro-government United Front for Democracy Against Dictatorship (UDD).

In order to contain the outrage among Pheu Thai’s Red Shirt supporters, who are drawn from the rural and urban poor, the UDD announced a rally on Bangkok’s outskirts on Saturday to oppose Yingluck’s removal. Tens of thousands of people are expected to attend. But UDD leader Jatuporn Prompan played down the court ruling, telling Reuters that “the court chose a middle way.” At a rally in Nonthaburi on Tuesday, Jatuporn urged the Red Shirts not to protest outside the Constitutional Court.

Both the UDD and Pheu Thai fear losing control of their Red Shirts supporters and have so far avoided staging any significant rallies in central Bangkok. Yingluck and Thaksin represent layers of the ruling class that are just as hostile to any independent movement of the working class as their rivals and just as willing to attack democratic rights and living standards.

Significantly, the US government did not condemn the blatantly anti-democratic removal of an elected prime minister. State Department spokesperson Jen Psaki said Washington called on “all sides to resolve Thailand’s political tensions in a peaceful and democratic manner” and move toward an election. Washington tacitly approved the 2006 coup that removed Thaksin. The Obama administration considers the Thai military an important ally in its military build-up in the Asia-Pacific region, which is aimed at encircling and preparing for war against China.

Behind the push to install a dictatorship in Thailand lies the country’s deepening economic crisis. According to the Bank of Thailand, the economy almost certainly contracted in the first quarter of the year, due to sharp falls in tourism, exports and investment, exacerbated by the political crisis. This compares to an average of more than 5 percent growth from 2002 to the start of the global financial breakdown in 2008.

Foreign and local capitalists are clamouring for the political impasse to be resolved so that the burden of the economic downturn can be imposed on the working class, by eliminating the rice subsidy and implementing other austerity measures. The Financial Times on Monday demanded the resignation of Yingluck in order to scrap the subsidy, on which millions of people rely.

Kesara Manchusree, executive vice president of the Thai stock exchange, told the Nation that the markets reacted positively to Yingluck’s removal, but warned that they could fall in the event of further unrest. Thai Chamber of Commerce vice chairman Pornsilp Patchrintanakul urged Niwatthamrong to compromise on “reforms” with the PDRC—but the PDRC has repeatedly rejected Pheu Thai’s attempts to reach a settlement.