BANGKOK - Thai authorities prepared Wednesday to cut water, electricity and food supplies to anti-government demonstrators camped in central Bangkok, turning to siege tactics after a compromise offer failed to end their protest.

Officials originally planned to start the blockade at midnight, but then said it might be delayed because of problems for people not participating in the protest. A major hospital is almost adjacent to the protesters' main stage, and numerous residential and commercial buildings are nearby.

As midnight passed, there was no sign of a cutoff of services, and speeches from the stage carried on without interruption.

Col. Sansern Kaewkamnerd, spokesman for the agency in charge of suppressing the protest, said security forces would "not use force at this stage," but left open the possibility of more violence in Thailand's two-month political standoff if the protesters refuse to disperse.

The "Red Shirt" protesters believe Prime Minister Abhisit Vejjajiva's coalition government came to power illegitimately through manipulation of the courts and the backing of the powerful military, and are demanding new elections.

With the government's tougher tone, chances of a negotiated settlement appeared almost doomed, just days after the two sides had agreed in principle to a reconciliation plan. Government spokesman Panitan Wattanayagorn said Abhisit's offer to hold November elections -- one year before his term expires -- was now off the table as the protesters had refused to budge.

From behind their barricades, leaders of the Red Shirts were defiant.

"Firstly, we are using our own electricity generators, so we are not dependent on the public power source," said one, Jatuporn Prompan. "Secondly, if the government decides to cut water ... this will also affect half of the city. So we do not care about the government's threat."

Another leader, Nattawut Saikua, told reporters that "We have made a decision to hold our ground here to call for justice for our people. We are going to stay here no matter what happens."

Sansern called the siege plan "a full-scale measure to limit the freedom of protesters and to close down the area 100 per cent."

The measures include cutting water, electricity and cellphone signals to the protest zone, and stopping bus, rail and boat services to the area, Sansern said, adding that authorities would also seal off entrances to the area.

As night fell, however, he said security officials were making a last-minute review of the measures, suggesting they might be delayed. He said authorities had already begun blocking transport into the area.

For electricity and water, "we have to assess who is going to face the impact more: the protesters or people living in the area," he told The Associated Press.

Residential buildings in the affected area sent notices to tenants, advising them to relocate.

Major shopping malls along the occupied streets closed weeks ago and luxury hotels have shut their doors to guests.

The U.S. Embassy posted a notice to Americans about the intended blockade, and reiterated earlier warnings that "U.S. citizens should avoid travel to and lodging in this area and the areas in and around all demonstrations, if possible."

Abhisit has set no exact timeframe for escalating the crackdown if the siege fails, government spokesman Panitan told cable television network TNN. "He simply said he wants the protest to end soonest."

The Red Shirts, who are largely drawn from the rural and urban poor, see Abhisit's government as serving an elite insensitive to the plight of most Thais. The protesters include many supporters of former Prime Minister Thaksin Shinawatra, a populist leader who was accused of corruption and abuse of power and ousted in a 2006 military coup.

Thaksin, a former telecommunications billionaire who fled overseas to avoid a corruption conviction, is widely believed to be helping to bankroll the protests. He claims to be a victim of political persecution.

After agreeing last week in principle to Abhisit's offer of November polls, the protesters later said they would stay put until the deputy prime minister faces criminal charges for violence during the protests. At least 29 people have been killed and 1,400 injured.

The government then announced late Tuesday it was rescinding the compromise offer and pledged a harder approach to end the standoff.

"What is essential right now is to return normalcy to society," Abhisit said.