Thailand's anti-corruption commission announced it will charge prime minister Yingluck Shinawatra with neglect of duty as riot police and anti-government protesters clashed in Bangkok on Tuesday, leaving a policeman and two others dead and dozens injured.
The commission will summon Ms Yingluck to appear before it next week over her role in a controversial rice farm subsidy scheme that has cost Thailand billions of dollars.
If found guilty Ms Yingluck, Thailand's first woman prime minister, could be removed from office.
Government officials say the commission's action is part of what they see as a judicial coup orchestrated by powerful figures in Bangkok.
Ms Yingluck, who chaired a body that oversaw the scheme that has left Thailand with huge stockpiles of unsold rice, denies any wrongdoing and says the scheme was established to benefit farmers.
The commission's announcement came as new violence erupted when protesters resisted the most forceful effort yet to reclaim protest sites across the capital.
Gunshots and explosions rang out after police attempted to remove barricades that protesters had erected near a bridge near key government offices.
The government said that a grenade was used against the police and that tear gas was fired by protesters - not the police.
"I can guarantee that teargas was not used by security forces. The forces did not take teargas with them," said National Security Council chief Paradorn Pattanathabutr.
One of the dead protesters was shot in the head.
Some protesters claimed that police snipers were deployed in locations hours before the violence broke out.
At least four of the injured were police.
After intermittent gunfire police withdrew from the area.
Dozens of protesters then overturned and smashed police vehicles.
One abandoned vehicle with weapons inside was lifted away by protesters using a fork lift.
"Police are killers," a young man yelled as he attacked a vehicle.
Uthi Bencharit, a factory worker, said the shooting started "all of a sudden from the police side" but there were also what seemed to be firecrackers from the protesters. "I think the police wanted to flex their muscles," he said.
Asked whether he believes the unrest will get worse, he said: "I hope not. I think the military will eventually step in. I don't think they can let things go on like this."
Protest leaders accused police of using weapons against their movement they claim is peaceful.
"We insist that we will remain in the seized areas because we don't want the cabinet and prime minister to return and use their barbaric powers," said Ekanant Prompan, a spokesman for the protesters.
Earlier Tuesday about 100 protesters were arrested during a police operation to reclaim the Energy Ministry.
Security officials said 15,000 police had been mobilised to clear protest sites in an operation they called "Peace for Bangkok Mission."
The operation came after talks between senior police and protest leaders had collapsed amid renewed acrimony in a conflict that in broad terms pits one elite group of Thais backed by Bangkok's middle class with another group backed by exiled former prime minister Thaksin Shinawatra, who is Ms Yingluck's sister.
The protesters have been rallying since November in a campaign to force the powerful Shinawatra family from politics and set-up an unelected body to run the country for up to two years.
The violence brought to 13 the number of people killed since the protests began after the government attempted to pass an amnesty bill that would have allowed Mr Thaksin to return from exile without having to serve jail time for corruption.
Labor minister Chalerm Yoobamrung said on Monday that if protesters did not leave protest sites at key government buildings police would move to reclaim them this week.
Larger protest sites remain unaffected so far in Bangkok's business and shopping districts.