BANGKOK - The founder of Thailand's yellow shirt protest movement, which was behind the week-long occupation of Bangkok's main airports last year, was shot and wounded on Friday, but a doctor said his life was not in danger.

The assassination attempt came hours before the government extended a state of emergency in the capital at a cabinet meeting to discuss the past week's political violence. It also agreed to increase government borrowing to support the beleaguered economy.

Sondhi Limthongkul received a bloody head wound but survived after gunmen riddled his car with bullets at a petrol station before dawn.

He is safe now and able to talk, said Dr. Chaiwan Chareonchoktawee, director of Vajira hospital, after Sondhi had an operation to remove bullet fragments and bits of skull bone.

Other leaders of Sondhi's People's Alliance for Democracy (PAD), which was not involved in the political unrest that prompted the state of emergency, told their supporters to remain calm.

Bank of Thailand Deputy Governor Atchana Waiquamdee told reporters the political turmoil could affect government efforts to revive the economy and delay a recovery.

Political instability is affecting not only confidence, but also government policies, she said on Friday.

At the cabinet meeting, the government agreed to increase its borrowing in order to offset a revenue shortfall and get more funds to stimulate the economy.

The stock market was volatile but ended up 0.85 percent while the baht was marginally weaker.

YELLOWS AND REDS

Sondhi's yellow-shirted PAD is a motley collection of royalists, academics, ex-military people and Bangkok's middle classes united in their loathing of former Prime Minister Thaksin Shinawatra, who was deposed in a 2006 military coup and lives in self-imposed exile.

Thaksin's red-shirted supporters invaded and caused the cancellation of a summit of Asian leaders in Thailand last weekend and then staged protests in Bangkok in which two people were killed before being ended on Tuesday.

PAD leaders denounced the failure of the security services to prevent the attack on Sondhi, especially as security was supposed to be tight under the emergency, and called for the national police chief to be sacked.

But they told their members to be calm and did not call for action, other than the continuation of a series of local rallies, the next to be held on the tourist island of Phuket on Saturday.

We're not pointing the finger at anybody as the mastermind of this operation. We will wait for the government to find out, Suriyasai Katasila told a news conference broadcast live on PAD's radio station.

Earlier, another PAD leader, Pipop Thongchai, had blamed Thaksin's lieutenants who could not accept defeat after their setbacks over the past week, when troops forced them to end a siege of Government House.

Bangkok Metropolitan Police Commissioner Vorapong Chiewpreecha told television that 84 spent cartridges were found at the scene of the assassination attempt.

We also found an M-79 grenade that was fired but missed Mr. Sondhi's vehicle. It hit a passing public bus but did not go off, he said.

Sondhi's driver was seriously wounded and his bodyguard suffered minor injuries.

Finance Minister Korn Chatikavanij said on Thursday the turmoil meant big tax shortfalls as businesses delayed investment and the tourist sector faced more losses. He noted forecasts that the economy could shrink 5 percent this year.

After a 6.1 percent contraction in the economy in the final quarter of 2008, Thailand is almost certainly experiencing its first recession since the Asian economic crisis 11 years ago.

Thailand