Thailand's prime minister Yingluck Shinawatra has dissolved the lower house of Parliament and called for elections in an attempt to calm the country's deepening political crisis.

Ms Yingluck's announcement today came as thousands of anti-government protesters vowed to march through Bangkok in a "final showdown" against her government.

She said "there will be new elections according to the democratic system", but did not set a date.

"After listening to opinions from all sides, I have decided to request a royal decree to dissolve parliament," Ms Yingluck said in a televised statement. "There will be new elections according to the democratic system."

It was unclear whether the move would ease the country's political stand-off, which deepened yesterday after the main opposition party resigned from the legislature.

Protest leader Suthep Thaugsuban called on supporters to stay peaceful, but many feared the day could end violently when demonstrators converged from nine locations on Ms Yingluck's office at Government House. More than 60 Thai and international schools in Bangkok have closed as a precaution.

Thailand has been plagued by political turmoil since the army toppled Ms Yingluck's 's brother, former Manchester City FC boss Thaksin Shinawatra, in a 2006 coup.

In broad terms, the conflict pits the Thai elite and the educated middle-class against Mr Thaksin's power base in the countryside, which benefited from populist policies designed to win over the rural poor.

"We will rise up. We will walk on every street in the country. We will not be going home again," said Mr Suthep, whose supporters have occupied the Finance Ministry and part of a vast government complex for more than a week.

"The people who will be going home empty-handed are those in the Thaksin regime."

Since the latest unrest began last month, at least five people have been killed and at least 289 injured. Violence ended suddenly last week as both sides paused to celebrate the birthday of the nation's revered king, who was 86 on Thursday.

Police estimated that about 100,000 protesters were on the streets of Bangkok.

As Ms Yingluck spoke, long columns of protesters halted traffic on major Bangkok boulevards. They filled a major four-lane road in the city's central business district, waving flags, blowing whistles and holding a huge banner that said "Get Out Shinawatra".

The crisis boiled over after Ms Yingluck's ruling party tried to ram a controversial amnesty bill through the legislature. Critics say it was designed mainly to bring back Mr Thaksin, who lives in self-imposed exile in Dubai to avoid jail time for a corruption conviction he says was politically motivated.

Abhisit Vejjajiva, the leader of the Democrat party and a former premier, said Ms Yingluck's government had become "illegitimate" since then and his party had no choice but to pull out of the lower house. The Democrats held 153 of the 500 seats in the legislative body, according to the latest figures on their website.

"The solution to our current problems needs to start with the showing of responsibility," Mr Abhisit said. "The prime minister has never showed any responsibility or conscience."

The minority Democrats - who are closely allied with the protesters - have not won an election since 1992 and some of their leaders appear to have given up on electoral politics as a result. The protesters are demanding a non-elected "people's council" lead the country instead.

Ms Yingluck's government, by contrast, came to power in a landslide vote in 2011 that observers said was free and fair.

In a speech yesterday, Ms Yingluck said again that she was not trying to cling to power and would be "happy to resign" and dissolve parliament if that could ease the crisis. But she said those things could only happen if new elections were organised within 60 days and all parties accepted the outcome.

Mr Suthep has repeatedly rejected those initiatives and refused to negotiate.

Ms Yingluck also reiterated an offer to set up a national forum to find a way out of the crisis. She said if there was still no resolution, a national referendum could be held, but she did not specify on what.

Any "government that comes to power without elections would significantly affect our image and confidence in the country," she said, referring to Mr Suthep's demand for a specially-appointed people's council to rule.