AFP

Thailand's jailed former premier Thaksin Shinawatra had his prison sentence cut from eight years to one by the king on Friday, just days after he returned from 15 years in exile.

The move came a day after the billionaire ex-prime minister, 74, applied for a royal pardon over graft and abuse of office convictions amid widespread speculation about a backroom deal to allow him clemency.

Thaksin, twice elected PM and ousted in a 2006 military coup, was sent to prison last week immediately after returning to the kingdom for the first time since 2008.

The partial pardon from King Maha Vajiralongkorn was confirmed by the official Royal Gazette, with the announcement pointing to his service to the country as prime minister.

"He is loyal to the institution of monarchy. When prosecuted, he respected the justice system," the statement said, noting that Thaksin also suffers numerous health problems.

"His Majesty the King has granted him amnesty and reduced the sentence on Thaksin Shinawatra, the prisoner, to one year in prison, so that he could use his expertise and experience to develop the country further."

His homecoming on Tuesday last week coincided with his Pheu Thai party returning to government in alliance with pro-military parties, leading many to conclude that an agreement had been struck to cut his jail time.

Former telecoms tycoon and Manchester City owner Thaksin is one of the most influential but divisive figures in modern Thai history.

Loved by millions of rural Thais for his populist policies in the early 2000s, he has long been reviled by the country's royalist and pro-military establishment.

Much of Thai politics over the last two decades has been coloured by the establishment's efforts to keep Thaksin and his allies out of power.

His supporters gave him a hero's welcome on landing in Bangkok and his first public act was to prostrate himself in homage before a portrait of the king at the airport.

Hours later Pheu Thai's Srettha Thavisin was confirmed as prime minister -- the party's first premier since Thaksin's sister Yingluck was thrown out in a coup in 2014.

On his first night back in Thailand, Thaksin was moved from jail to a police hospital, with prison medical officers saying he needed close monitoring for various health problems, including heart trouble.

Parties linked to Thaksin dominated every Thai election since 2001 -- until this year, when the progressive Move Forward Party (MFP) won the most seats.

But the new coalition government has shut MFP out while bringing in parties linked to the coup-maker generals who ousted Thaksin and Yingluck, leading to anger from many Thais.

AFP