Thailand's ruling party chooses a Shinawatra as new leader

Paetongtarn, 37, nicknamed "Ung Ing", was among Pheu Thai's prime minister candidates in a May election, though another nominee Srettha Thavisin was chosen by parliament.

The party managed to form a coalition with rival pro-military conservative parties after the progressive Move Forward Party, which won most seats, was blocked by an unelected senate in its bid to form a government.

Paetongtarn, whose family dynasty has seen three former premiers including her father Thaksin Shinawatra, thanked party members for endorsing her, vowed to build on past successes and targeted the party's return to top spot of public approval.

"Pheu Thai will continue with its important mission in improving people's livelihood," she told hundreds of party members at the party headquarter in Bangkok after being elected by members in a general assembly.

"We will look to the stars with our feet firmly on the ground and standing strongly by people's side."

Paetongtarn, a former businesswoman with a degree in hotel management from England's University of Surrey, also thanked her father Thaksin, whom she said taught and inspired her about politics and public life.

Thaksin returned to Thailand in August on the same day that Pheu Thai secured support from former bitter rivals to form a new government, ending 15 years in self-imposed exile to avoid graft convictions after he was ousted by a coup in 2006.

Thaksin's eight-year sentence was commuted to one by King Maha Vajiralongkorn in September. He is serving his conviction at hospital after falling ill on his first night in prison.

The moves fueled speculation of a deal and detente between Thailand's pro-military elites and the Shinawatra family which is loved by many for its populist policies.