By Panu Wongcha-um and Panarat Thepgumpanat
BANGKOK (Reuters) -Thailand's populist Pheu Thai Party announced on Monday a controversial pact to form a new government with parties backed by its longtime enemy the military, vowing it would still deliver on its electoral promises including a new constitution.
Thailand's bicameral parliament has been deadlocked for weeks on forming a government, after the anti-establishment election winner Move Forward succumbed to conservative resistance in parliament, leaving second-placed Pheu Thai to take up the effort.
While the proposed 11-party alliance could end five months of caretaker government, the deal between Pheu Thai and army-backed parties could also prolong concern about a new bout of instability after nearly two decades of on-off turmoil.
Parliament will vote on Tuesday on the prime ministerial bid of Pheu Thai's Srettha Thavisin, a 60-year-old real estate mogul who was thrust into politics only a few months ago.
Srettha said it was necessary to work with military-backed parties, which were created by a military that led coups against former premiers Thaksin Shinawatra and sister Yingluck Shinawatra in 2006 and 2014.
"To move the Pheu Thai Party forward, to help the people, we are not lying to the people but we have to be realistic," he told a press conference.
"Over the past nine years Pheu Thai was not in government, we didn't have power, it is clear people's living standards dropped."
CONTROVERSIAL PACT
Such a coalition would be controversial to many voters given the clear-cut outcome of the May 14 election, in which Pheu Thai and Move Forward thrashed conservative parties led by generals, in what was seen as a resounding rejection of nine years of government led or backed by the military.
An opinion poll on Sunday showed most Thais disagree with the idea of a coalition that includes military-backed groups.
The alliance is the product of a constitution written by the military that make it extremely difficult for election winners not favoured by the conservative establishment to form governments.
Move Forward, despite huge youth and urban support for its progressive agenda, has been cast to the parliamentary opposition and has refused to back Pheu Thai's multi-party effort, calling it a distortion of the election result and against the public will.
Pheu Thai said it would still forge ahead with changing the constitution to make it more democratic, but would steer clear of amending laws related to the powerful monarchy.
It vowed to deliver on promises to raise the minimum wage and provide handouts in digital currency - trademark populist policies of Pheu Thai's billionaire figurehead Thaksin, who has loomed large over Thai politics since his overthrow in 2006.
Thaksin, 74, has dominated headlines in recent days and reiterated his plan to return home on Tuesday and end 17 years of self-imposed exile, despite being a fugitive in Thailand after skipping jail for abuse of power and more.
Posting on Monday on social media platform X, formerly Twitter, Thaksin said he wanted to "come back to live on Thai soil and breath the air with other Thai people".
(Reporting by Panarat Thepgumpanat, Chayut Setboonsarng and Panu Wongcha-um; Writing by Martin Petty; Editing by Robert Birsel and Alison Williams)