Thailand's army chief could be lining up the pieces for an end-game to a deadly political crisis, but risks raising the stakes even higher given the threat of a violent backlash from government supporters, experts say.

Prospects for an end to the nearly seven-month crisis could hinge on talks between the kingdom's main political rivals due to be hosted Wednesday by General Prayut Chan-O-Cha, a day after he imposed martial law.

If the military can succeed in brokering a compromise then Thailand might be able to claw itself out of the turmoil, said Thitinan Pongsudhirak, director of the Institute of Security and International Studies at Bangkok's Chulalongkorn University.

But "this is a very dangerous role the army is playing", he added.

"If they don't do it well, we could see an outright military coup and protests against the military, and all kinds of worst-case scenarios in Thailand."

The enfeebled government has called for fresh elections on August 3.

But the opposition wants vaguely defined anti-corruption reforms first and has vowed to stay on the streets until it has ended the long-standing political dominance of ousted former premier Thaksin Shinawatra.

- 'Creeping coup' -

Despite strenuous denials by the military that the invocation of century-old legislation on Tuesday was tantamount to a coup, observers said the army chief is now firmly in control.

"The martial law act of 1914 is beginning to illuminate a shadowy route toward much-enhanced power by the iron heel of the army," said Paul Chambers, director of research at the Institute of Southeast Asian Affairs at Chiang Mai University.

He described it as a "creeping coup, a pre-coup, a half-way coup" that might lead to the installation of an arch-royalist prime minister in the kingdom, which has been without a fully functioning government since December.

The intervention of the generals took security control out of the hands of the government, reinforcing its image as largely powerless following the recent dismissal of prime minister Yingluck Shinawatra -- Thaksin's sister -- in a controversial court ruling.

Soon after martial law was declared, the government's opponents stepped up their push to invoke a vaguely worded clause in the constitution to remove caretaker Prime Minister Niwattumrong Boonsongpaisan and appoint a new leader.

So far Niwattumrong, like Yingluck, has resisted pressure to step down.

- 'Taking power' -

A group of unelected lawmakers in the upper house of parliament, the Senate, said they would ask the Constitutional Court to rule whether the cabinet broke the law by declaring a state of emergency earlier in the crisis.

The lawmakers argue that the move was for the benefit of the ruling party.

If the court rules against the government it could lead to its removal from office.

"I would not be surprised if the next step is a military coup or the military taking charge with the advice of the Senate and leading to the appointment of a new prime minister," said Pavin Chachavalpongpun, associate professor at the Centre for Southeast Asian Studies at Kyoto University in Japan.

"But certainly the military is trying to take power from the government."

"Red Shirt" supporters of Yingluck and her brother Thaksin, who was toppled as premier in a 2006 coup, have warned the country could descend into civil war if power is handed to an unelected leader.

Some experts believe that a struggle is unfolding to decide who will run the country when the more than six-decade reign of revered but ailing 86-year-old King Bhumibol Adulyadej eventually ends.

The succession is a taboo topic in Thailand and its discussion is restricted by harsh royal defamation laws.

- Fears of backlash -

The last coup eight years ago unleashed a cycle of political violence and rival street protests that have left deep fault lines running through the Southeast Asian nation.

The imposition of martial law could be aimed at warding off any backlash by the Red Shirts, whose mass rallies against the previous government in 2010 ended in a bloody military crackdown that left dozens of people dead, experts said.

"The declaration of martial law is likely designed to pre-empt any Red Shirt uprising in the capital following the Senate's nomination of a new government, which is likely in the next weeks," said Alecia Quah, senior analyst at consultancy IHS Country Risk.

"Given the heavy army presence in Bangkok, Red Shirt protesters are unlikely to turn violent or confront opposition protesters, as the military would swiftly suppress this," she added.