"If unrest occurs, the government is not the responsible party," Satit Wongnongtaey, a minister at the Prime Minister's office, told reporters, adding that security was being stepped up to control the crowds expected in central Bangkok on Wednesday.
Prime Minister Abhisit Vejjajiva made a televised statement on Monday night warning that his government would use firm measures to prevent bloody confrontation between police and protesters.
Supporters of the United Front for Democracy against Dictatorship (UDD) have surrounded Thailand's seat of government since March 26 in a bid to force Abhisit out of office.
The UDD says up to 300,000 people are expected to join the rally, but UDD leader Nattawut Saikeau told Reuters it would be peaceful, like the Government House siege. "Our protest will be peaceful and we have measures to prevent anybody from inciting violence," he said.
The demonstration will focus on Government House but leaders say it could expand to nearby streets to disrupt traffic and they hope it will spread as far as the residence of former Prime Minister Prem Tinsulanonda, the chief adviser to King Bhumibol Adulyadej.
Thaksin has accused Prem of playing an active, behind-the-scenes role in the 2006 coup that ousted him, an allegation denied by the former army general.
Thai financial markets are worried about the looming political confrontation, and the stock market edged down on Tuesday. "Domestic politics remains the key risk factor for our market, with investors likely to sell due to fears related to the big rally on April 8," said Kosin Sripaiboon, head of research at UOB Kay Hian Securities.
Abhisit has chosen to avoid confrontation between the police and UDD protesters, staying away from his office for the past two weeks, part of which he spent in London representing the Association of Southeast Asian Nations (ASEAN) at the G20 summit.
The government held its weekly cabinet meeting on Tuesday in the resort town of Pattaya, where leaders of ASEAN and other Asian countries gather for a summit at the end of the week.
Thaksin, a former telecommunications billionaire, lives in exile after being convicted on conflict of interest charges last year.
His absence has not ended the long-running political impasse, with Bangkok's royalist, military and business elite, who accused Thaksin and his allies of corruption and abuse of power, lining up against the rural and urban poor who loved his populist policies.
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