A Thai court on Wednesday dismissed a case against former prime minister Somchai Wongsawat, a brother-in-law of deposed former prime minister Thaksin Shinawatra, in a rare victory for the pro-Thaksin, anti-junta movement.

Somchai, along with then-deputy prime minister Chavalit Yongchaiyuth, was accused of abuse of power over a deadly crackdown on demonstrators in 2008.

Two people died and hundreds were wounded when police used tear gas to clear anti-government "yellow shirt" protesters who had parliament in Bangkok.

"Even though there were people who were injured and killed, in that event it was difficult for police to know that the tear gas would cause injuries and death in that manner," the court said in a statement released after the verdict.

His opponents accused Somchai of being Thaksin's puppet.

Thaksin, who lives abroad to avoid a jail sentence handed down for graft in 2008, was ousted in a 2006 coup but remains a major influence over Thai politics.

The Shinawatra family and their political allies are at the heart of a political conflict that has divided Thailand for more than a decade.

The crisis pits former telecommunications tycoon Thaksin, and his legions of supporters, against the Bangkok-based elite which sees him as a threat to the old royalist-military establishment.

Members of the Shinawatra family have accused their opponents of political persecution.

The 2008 protest by the People's Alliance for Democracy (PAD) group, an anti-Thaksin movement whose street action led ultimately to the 2006 coup against Thaksin, was among the worst political crises in recent Thai history.

In October that year, protesters surrounded parliament forcing Somchai to escape over a back fence after delivering a policy address.

Police dispersed protesters with volleys of tear gas. At least 400 were wounded.

Wednesday's ruling upset former members of the now-defunct PAD. Some stood outside the court after the ruling and shouted: "Murder!".

The military took power in Thailand in a 2014 coup, ousting Thaksin's sister, prime minister Yingluck Shinawatra.