* Red shirts offer to back Yingluck in streets
* Protesters reject election, demand "people's council"
* Protest leader asks army, police chiefs to choose sides
* Movement aims to eradicate influence of former PM Thaksin (Recasts, adds details, quotes)
By Amy Sawitta Lefevre and Aubrey Belford
BANGKOK, Dec 11 (Reuters) - Thai Prime Minister Yingluck Shinawatra's red-shirted supporters said on Wednesday they were ready to defend her government in the streets from an elite-backed protest movement seeking to install an unelected "People's Council".
The warning highlights the risks of a crisis centred on the electoral and legislative power of the Shinawatra family, revered by the rural and urban poor but reviled by Bangkok's royalist elite as inept and graft-ridden.
The turmoil has veered from violent protests in which five people were killed and more than 300 wounded to occupations of government buildings and, in recent days, bewildering statements by Suthep Thaugsuban, a veteran politician who quit the mainstream opposition to lead the protesters.
He has called on police to arrest Yingluck for treason, ordered civil servants to report to him and called for citizen "peacekeeping forces" to take over from police. On Wednesday, he told the army and police chiefs to report to him.
"We have set the time of 8 p.m. Thursday as our deadline to meet with security heads," he told reporters.
It is unclear if they will meet. Security forces have remained aligned with the government and missed deadlines have become the norm for a protest movement that has openly courted anarchy on Bangkok streets in hopes of inducing a military coup or judicial intervention to bring down Yingluck.
Suthep says parliament, now controlled by Yingluck's Puea Thai Party, should be suspended and replaced by an unelected People's Council made up of appointed "good people".
If that happens, the United Front for Democracy Against Dictatorship (UDD), a red-shirted protest movement based largely in Thailand's populous north and northeast, would rally to Yingluck's side, said Jatuporn Promphan, one of its leaders.
"It is the UDD's job to bring together en masse the red shirts and those who love democracy and don't agree with Suthep's methods. There will be many more people than Suthep managed to gather," he told Reuters in an interview.
Suthep says his People's Council would eradicate the influence of Yingluck and her billionaire brother, former prime minister Thaksin Shinawatra, who was ousted in a 2006 military coup and has lived in self-exile since 2008 to avoid jail for corruption, a charge he says was politically motivated.
Thaksin has remained a powerful force from abroad, sometimes convening cabinet meetings by webcam from his villa in Dubai
Struggling to defuse the crisis, Yingluck dissolved parliament on Monday and called an election for Feb. 2. But the protesters, aware her party would almost certainly win on the back of rural support in the country of 66 million people, say they do not want elections.
The impasse is a reminder of the turmoil that has overshadowed Thailand for much of the last decade.
On one side is Thaksin, a former telecommunications tycoon who redrew the political map by courting rural voters to win back-to-back elections in 2001 and 2005 and gain an unassailable mandate that he then used to advance the interests of major companies, including his own.
On the other is the elite and establishment, threatened by his rise. Thaksin's opponents include unions and academics who saw him as a corrupt rights abuser, and the urban middle-class who resented, as they saw it, their taxes being used as his political war chest and regard his sister as a puppet.
It is a confusing picture characterised variously as a class war, a rural-urban split, a clash between ancient and modern or a showdown between the royalists and republicans.
Akanat Promphan, Suthep's step-son and anti-government protest spokesman, said if Yingluck resigned, the Senate would name a "neutral prime minister" and the People's Council would be the legislative body and help set up a "parallel government".
Suthep has said he wants to make provincial governors directly elected and institute reforms of the corruption-plagued police and bureaucracy, but he has offered few specifics of how he would run the country beyond criticisms of government policies such as a troubled rice-subsidy scheme.
Public support for his movement has fluctuated. Police estimated the number of anti-government protesters on Bangkok's streets at about 6,000 on Wednesday, a fraction of the 160,000 who rallied on Monday.
The opposition Democrat Party will meet next week to decide whether to boycott the election, a step that could inflame tensions and heighten the risk of Suthep's group seizing power if the election is ignored and the politically powerful military or the judiciary get involved, a familiar pattern in Thailand.
Although Thaksin or his allies have won every election of the past decade, the politicised courts have often intervened, annulling an 2006 election won by Thaksin on a technicality and later dissolving his Thai Rak Thai Party for electoral fraud.
His party's next incarnation, the People's Power Party, suffered the same fate. Nearly 150 executives of both parties were banned for five years.
After courts brought down two Thaksin-allied prime ministers in late 2008 and the Democrats came to power through a parliamentary vote, believed to be orchestrated by the military, the red shirts paralysed Bangkok in April-May 2010.
The red shirts cut short a rally at a Bangkok stadium on Dec. 1 after fatal clashes outside and postponed a Dec. 10 demonstration in Ayutthaya, north of Bangkok.
Asked what would bring them out on to the street, Jatuporn said: "When chaos ensues or when Suthep's side uses violent methods to gain power." (Additional reporting by Apornrath Phoonphongphiphat and Pairat Temphairojana; Writing by Jason Szep)