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Thai police completely abandoned Prime Minister Yingluck Shinawatra's declared policy of not using violence against anti-government protesters.
Despite her assurances that police would not use force, officers fired round upon round of tear gas on Sunday to repel the protesters.
Police stepped up their response to the increasingly violent demonstrations.
"We are alternating between the use of water cannons, tear gas and rubber bullets," said National Security Council head Paradorn Pattanathabutr.
"Rubber bullets are being used in one area only and that is the bridge near Government House."
Protesters demolished many of the concrete barriers set up to defend Government House - the prime minister's office in the heart of Bangkok.
Tear gas was also used against protesters at the Bangkok police headquarters.
Protest leader Suthep Thaugsuban met Ms Shinawatra late on Sunday but insisted there had been no negotiations, but merely an ultimatum.
Ms Shinawatra said yesterday that she would "open every door" to find a peaceful solution to the crisis.
"If there's anything I can do to bring peace back to the Thai people I am happy to do it."
But her words were belied when the government issued a warrant for the arrest of Mr Thaugsuban on charges of sedition.
Mr Thaugsuban claimed the Sunday meeting had been arranged by the military, which has sided against Thaksin-allied governments in previous crises and put down a pro-Thaksin movement in 2010. More than 90 people died then.
The military has not been publicly involved this time and Ms Shinawatra said that "the armed forces will be neutral and I know they want to see the country in peace."
Ms Shinawatra has also rejected demands to dissolve parliament and establish a "people's council" as unconstitutional.
The conflict pitting Bangkok's middle class and royalist elite against the mostly poor, rural supporters of Ms Shinawatra and her brother Thaksin, appeared yesterday to be escalating out of control, with no end in sight.