BANGKOK, Dec. 10 -- Thai Prime Minister Yingluck Shinawatra on Monday announced the dissolution of the House of Representatives to defuse the country's prolonged political tension.

Yingluck said the incumbent government will remain functional as a caretaker until a new general election is held.

The Thai king approved the House dissolution and the holding of the next general election slated for Feb. 2, 2014, according to the Royal Gazette.

However, anti-government protest leader Suthep Thaugsuban would not call off the street rally, but demanded Yingluck's resign as caretaker prime minister.

The House is dissolved to return the power to the people at a critical moment, and let the people decide the way out for the nation, Yingluck said in a televised speech Monday morning.

Yingluck would likely run for her second term, Pheu Thai Party spokesman Prompong Nopparit later disclosed, as senior members of the party had agreed to list her as the top candidate for the coming election.

Yingluck's candidacy will be officially confirmed at a party meeting on Wednesday, Prompong said, adding the party's list of candidates for constituency elections will be finalized over the next week.

The House dissolution is a way for the government to show responsibility for the current political situation, Democrat Party leader Abhisit Vejjajiva said, adding it showed the government had no intention of clinging to power.

But the Democrat Party has not yet discussed whether or not to contest the coming election, according to the party's chief whip Jurin Laksanawisit.

The House dissolution has eased the political tension by satisfying all sides to a greater or lesser degree, deputy army spokesman Winthai Suvaree Winthai said, adding the army believed the opposing sides would be able to find a peaceful solution.

The Senate remains intact after the dissolution, but it cannot hold any meetings for the time being, unless with a royal decree from the king, Senate Speaker Nikom Wairatpanij said.

In a final effort to topple the government, hundreds of thousands of protestors marched in various processions to besiege the Government House on Monday. No conflicts were reported between the police and protestors.

While addressing protestors in the evening, Suthep announced the Thai people had already regained the ruling mandate from the government.

He asked protestors to persist with the rally to force Yingluck to resign as the caretaker prime minister.

He also demanded the establishment of a "people's council" to perform the duties of an interim government, but he did not give specifics about how the council would be formed.

Surapong Tovichakchaikul, interim deputy prime minister and foreign minister, dismissed Suthep's demand as unconstitutional, saying that in accordance with the constitution, the incumbent government would continue to play a caretaking role until a new government is formed through a general election.

The pro-government United Front for Democracy against Dictatorship (UDD), also known as the "Red Shirts," decided on Monday to cancel a massive rally planned in Bangkok's neighboring province of Ayutthaya on Tuesday.

But the UDD will stage a mass rally in the next few days if the protestors continue to compromise the country's democracy, said Jatuporn Prompan, a core leader of the UDD.