The army declared today a holiday and announced that the country's stock market, banks and schools would all be closed. Senior civil servants, the heads of state agencies and the directors of universities in the Bangkok metropolitan area were also summoned to report to the leadership council this morning.

Army officers said the coup had been organised by the commander-in-chief, General Sondhi Boonyaratkalin. It was reported to have been carried out by troops moved from the western province of Kanchanaburi.

Political unrest has been growing in Thailand since Mr Thaksin, democratically elected in 2001, ignited a row in January when he sold a family stake in a telecoms firm. Faced with mass protests amid allegations of corruption and abuse of power, he held a snap election in April but the constitutional court annulled it and called for a new election later this year.

Although a spokesman for Mr Thaksin insisted that the government remained in control, the prime minister cancelled the speech he was to give to the UN last night and it was not clear when he would return to Thailand.

An army spokesman, Colonel Akara Chitroj, said last night: "The government is no longer administering the country. I think Thaksin will not return to Thailand for the time being." The coup leaders last night met King Bhumibol Adulyadej, a revered figure in the country.

The army, in an announcement carried by TV and radio, declared that a "council of administrative reform" had been established, and apologised to the public for "any inconvenience".

Soldiers arrested the deputy prime minister and the defence minister.

Mr Thaksin, in a show of bravado from New York, declared a state of emergency and sacked Gen Sondhi. The prime minister had warned in August that military officers were plotting his overthrow.

Kenneth Bailes, a US state department spokesman, said: "We look to the Thai people to resolve their political differences in a peaceful manner and in accord with the principles of democracy and the rule of law."

Lt Gen Prapart Sakuntanak, on behalf of the coup leaders, promised the takeover would be temporary and power would be "returned to the people" soon.

Last night the Foreign Office was not advising visitors to leave Thailand or cancel trips. It said: "If you intend to travel to or are currently in Bangkok, you should monitor all available information on the local situation. You should also avoid any demonstrations and large crowds. Movements around government buildings and in public may be restricted until the situation becomes clearer."

Among the thousands of Britons in the country are 800 with Thomas Cook. "There is no effect in the main holiday resorts and no apparent threat to tourists," the firm said last night.