Cambodia has appointed the ousted prime minister of neighbouring Thailand, Thaksin Shinawatra, as a government adviser on the economy, a move likely to further cool relations with the current government in Bangkok.

State television on Wednesday night said King Norodom Sihamoni had officially approved Thaksin's appointment both as an adviser to the government and to Prime Minister Hun Sen personally. The appointment was dated Oct. 27.

Thaksin has been living mostly in self-imposed exile since he was ousted in a 2006 military coup after six years as prime minister. He was accused of corruption and abuse of power and insulting the country's constitutional monarch, King Bhumibol Adulyadej.

Thaksin was convicted in absentia last year of violating a conflict of interest law and sentenced to two years in prison, and his Thai passport has been revoked, forcing him to use passports from other countries. Thai officials claim he is trying to undermine the current government to regain power.

Hun Sen roiled a summit meeting of Asian leaders in Thailand last month by declaring that Thaksin was welcome to take refuge in Cambodia, and that such an appointment was under consideration. He said Thaksin was a friend and had been unfairly prosecuted for political reasons.

Thailand responded by saying it would seek to extradite Thaksin if he went to Cambodia, but Cambodia in turn said it would reject any such request, since extradition is not mandated for political offences.

Relations between the countries are already strained by a border dispute that has led to small but deadly military skirmishes over the past year and a half.

Wednesday's statement repeated the assertions that Thaksin's prosecution and conviction were politically motivated, and that Cambodia would not extradite him.

It said Cambodia was showing its virtue by the appointment, and cited a Thai proverb to the effect that friends must help each other during difficult times.

At the same time, the statement said Cambodia would continue its good relations and co-operation in all fields with Thailand.

Thai officials were not immediately available to comment. When Hun Sen first raised the issue last month,Thai Prime Minister Abhisit Vejjajiva sought to downplay any threat to relations.

"We're here to build a community, which means solidarity, which means unity. I don't want (Hun Sen) to be a victim or a pawn for somebody that undermines the interests of his country, and the interests of the region," Abhisit said.

Thaksin, a former telecommunications tycoon, had substantial business interests in Cambodia and was accused of pursuing special deals there for his family-controlled conglomerate while prime minister.

He has travelled since the coup to Dubai, Hong Kong, Nicaragua, Liberia and Montenegro in pursuit of investment opportunities.

Thaksin remains widely popular among Thailand's rural people and the urban poor, who benefited from his social welfare policies. He is still highly influential, rallying protesters in telephoned speeches from aboard.

His supporters say the Bangkok-centered elite is ignoring the mandate Thaksin won in two democratic elections because it feels its own privileges are threatened.

Britain revoked his visa in November last year, and Germany later revoked his residency permit.