Thailand’s main opposition Democrat Party has announced it will boycott snap elections set for 2 February.
Party leader Abhisit Vejjajiva told a news conference it would not be fielding candidates, saying: “Thai politics is at a failed stage”.
Prime Minister Yingluck Shinawatra called the election earlier this month in a bid to end weeks of mass protests.
The head of the Thai army has warned the country’s political divisions could “trigger a civil war”.
General Prayuth Chan-ocha has proposed a “people’s assembly” – made up of civilians from both sides, not the leaders, to heal the divisions.
The opposition-backed protests in Bangkok have caused Thailand’s most serious political turmoil since 2010.
Ms Yingluck won the last elections in 2011, but protesters say her brother – the controversial ousted former leader Thaksin Shinawatra – remains in charge.
At his news conference, Mr Abhisit told reporters his party had agreed it would not field candidates in the snap elections.
“The Thai people have lost their faith in the democratic system,” he said.
The prime minister dissolved parliament and called the election on 9 December in a bid, she said, to avoid violence on the streets and “to give back the power to the Thai people”.
Her Pheu Thai party has a majority in parliament, and draws significant support from Thailand’s rural areas. It is seen as well-placed to win February’s election.
General Prayuth Chan-ocha said he was deeply concerned by the latest crisis, with divisions not just in Bangkok but across the whole country.
“The situation could trigger a civil war,” he told the Bangkok Post.
Setting out his vision of a “people’s assembly”, he said it should be made up of people from both sides of the political divide – known as the “red shirts”, those who support Thaksin Shinawatra, and the “yellow shirts”, those who oppose him.
“It must be from a neutral group and comprise non-core representatives of all colours, and all colour leaders must be excluded,” he said.
He did not give details on how or when the assembly would be set up, but said any proposal “must come from a public consensus and the public must brainstorm how to reach that consensus”.
He stressed his grouping would be different to the “people’s council” proposed by the opposition.
“The people’s assembly must not be organised or sponsored by any conflicting group, as it would not be accepted by the other side,” he said.
His comments came after a defence council meeting on Friday to discuss the 2 February election.
Defence spokesman Col Thanatip Sawangsaeng said the army “is ready to support the Election Commission in organising the elections when asked”.
But a military source has told the BBC that privately the army believes it would be better for the election to be delayed – as sought by the opposition parties.
Protests began nearly a month ago after Thailand’s lower house passed a controversial amnesty bill, which critics said could allow Thaksin Shinawatra to return without serving time in jail.
Mr Thaksin is currently in self-imposed exile after he was overthrown in a military army coup in 2006 and convicted of corruption.
The protesters say the former prime minister remains the power behind the ruling Pheu Thai party, and accuse it of using public funds irresponsibly to secure votes.