A Thai court has found members of the party of ousted PM Thaksin Shinawatra guilty of violating election laws.
Thailand's Thai Rak Thai party, founded by ousted leader Thaksin Shinawatra, has been outlawed after it was found guilty of violating electoral laws.
Thai Rak Thai officials bribed smaller parties to influence the results of the 2006 poll, which was later annulled, the Constitutional Court said.
The Constitutional Tribunal said it "did not respect the rule of law" and could not exist as a political party.
The ruling could see the party dissolved and Mr Thaksin barred from political office for five years.
Judges ruled that two former cabinet ministers had made illegal payments to smaller parties to influence the result of the chaotic poll last April.
Mr Thaksin was removed in a military coup last September, accused of corruption and abuse of power.
Mr Thaksin was later removed in a military coup, accused of corruption.
'Worst-case scenario'
The Constitutional Tribunal found two senior Thai Rak Thai officials guilty of paying a small party to run in the April 2006 election.
Party members were also found guilty of paying another two small parties to bribe an election official to doctor their membership records, in order to influence the poll's outcome.
Mr Thaksin and his party still enjoy huge popularity in ThailandThis is bad news for the country's main political party and it is still not clear what the full implications of this are, says BBC Asia correspondent Andrew Harding.
Individual officials - perhaps 100 or more - could be barred from office for more than five years. In the worst-case scenario, the party itself could be dissolved, he says.
Earlier, the same court found that Thailand's oldest party, the Democratic Party, was not guilty of six charges of election fraud.
The court ruled that it had not maligned the Thai Rak Thai party during last year's election campaign, and thus would not be forced to disband.
Rise and fall
Correspondents in the capital, Bangkok, say the situation on the ground seems relatively calm.
But thousands of soldiers are on alert in case of unrest following the verdicts.
A former Thai Rak Thai deputy had threatened to mobilise thousands of protesters if the court ruled against it.
Interim Prime Minister Surayud Chulanont, who was installed after Mr Thaksin was overthrown last September, said he would issue an emergency decree if necessary.
Thaksin Shinawatra, the wealthy head of a telecommunications empire, founded the Thai Rak Thai (Thai Loves Thai party) in 1998, and its rapid emergence transformed Thai politics.
He swept into power in 2001, and became the first prime minister in Thailand's history to lead an elected government through a full four-year term in office.
Eighteen months later he was out of office after a military coup, accused of corruption and abuse of power. He now lives in exile in London.
