Ousted Thai prime minister Yingluck Shinawatra launched a defiant defence Friday at the first hearing of impeachment proceedings that could see her banned from politics for five years and deepen the country's bitter divisions.

Yingluck, Thailand's first female premier and the sister of self-exiled former leader Thaksin Shinawatra, was dumped from office by a controversial court ruling shortly before the army seized power in a coup on May 22.

She faces impeachment by the military-stacked National Legislative Assembly over her administration's loss-making rice subsidy programme which -- while popular among her rural power base -- cost billions of dollars and was a driving force behind protests that toppled her government.

Analysts say the impeachment move is the latest attempt by Thailand's royalist elite to neuter the political influence of the Shinawatras, whose parties have won every election since 2001.

A guilty verdict from the assembly carries an automatic five-year ban from politics, but could also galvanise her family's 'Red Shirt' supporters to protest after months of silence under martial law.

Yingluck, dressed in a black suit and pink shirt, arrived at the hearing flanked by security and a handful of her party members.

"I ran the government with honesty and in accordance with all laws," she told the assembly, rejecting the allegation of dereliction of duty by the nation's anti-graft body that resulted in the impeachment bid.

"The rice pledging scheme... aimed to address the livelihood of rice farmers, their debts and falling rice prices," she said, describing it as part of the "social contract" which she claimed helped 1.8 million rice farmers.

She ended a detailed and impassioned defence by urging the assembly to "deliberate with virtue, without prejudice or a hidden political agenda".

A successful impeachment needs three-fifths of the 250-strong assembly to vote in favour. A verdict is expected by the end of January.

Prosecutors are also in the process of deciding whether Yingluck should face a separate criminal case over the rice subsidy scheme.

Yingluck's supporters say the proceedings and the criminal charges are part of a wider campaign to cripple the Shinawatra clan and disempower their voters, who are drawn mainly from the poor but populous northern part of the country.


'A dilemma'

But the move is not without risks. A vote to impeach Yingluck could stir the Red Shirts to protest, ending months of relative calm since the army grabbed power and imposed martial law.

Thai politics expert Thitinan Pongsudhirak said the impeachment proceedings pose "a dilemma" for the junta and their supporters, who are desperate to land another body blow on the Shinawatras.

"On the one hand they (the junta) want to see her disqualified from Thai politics," said Thitinan, who is director of the Institute of Security and International Studies at Bangkok's Chulalongkorn University.

"But if they go all out against Yingluck -- by pushing for a ban or criminal charges -- they risk aggravating Thailand's political conflict by stirring up the pro-Thaksin camp."

Only a handful of supporters gathered outside the legislature Friday.

"This (impeachment) hearing is not fair," Varanchai Chokchana, a suited 63-year-old supporter clutching a bunch of roses for Yingluck, told AFP.

"They (the government) said they wanted reconciliation, but instead they have just seized power."

Yingluck's billionaire brother Thaksin, who was deposed as premier in a 2006 coup, sits at the heart of Thailand's deep schism, despite living overseas to avoid jail for a graft conviction.

He is loathed by the Bangkok-centred establishment, its supporters in the south and among the judiciary and army, but still draws deep loyalty in the north and among sections of the urban middle and working classes.

Since Thaksin swept to power in 2001, Shinawatra governments have been floored by two coups and bloodied by the removal of three other premiers by the kingdom's interventionist courts.

The Shinawatras' rise has coincided with the declining health of Thailand's revered 87-year-old King Bhumibol Adulyadej.

Observers say the current political turmoil reflects unease among competing elites over Thailand's future once his reign ends.

The junta says Thailand needs a new constitution to end the political crisis and battle endemic corruption.

But critics say those crafting the charter are mainly anti-Thaksin figures seeking to protect the interests of the elite.