Billionaire Thaksin, who was toppled in a bloodless coup in 2006 and is living abroad to avoid a jail term for corruption, arrived in Cambodia on Tuesday and received a warm welcome from Cambodian Prime Minister Hun Sen.

Cambodia Prime Minister Hun Sen (R) meets with ousted Thai Prime Minister Thaksin Shinawatra (L) at his house in the Kamdal province, near the outskirts of Phnom Penh November 11 ,2009. Thailand formally asked Cambodia on Wednesday to extradite fugitive former Thai Prime Minister Thaksin in a widening diplomatic row that threatens to worsen Thailand's political crisis. Thailand's embassy in Phnom Penh submitted the request for extradition a day after he arrived in Cambodia to take up a job as economic adviser to the Cambodian government, a move that has infuriated the Thai authorities. The diplomatic spat looks set to undermine any attempt by Southeast Asian leaders to project a united front in talks with U.S. President Barack Obama on Sunday in Singapore, the first-ever meeting between a U.S. leader and all 10 members of the Association of South East Asian Nations (ASEAN) REUTERS/Stringer (CAMBODIA POLITICS)

Three Thai diplomats gave extradition papers to officials at Cambodia's foreign affairs ministry Wednesday, but were then handed back a note from Phnom Penh formally denying their request, an AFP reporter saw.

"Our diplomatic note answering them is nothing beyond rejecting the extradition request," Cambodian Foreign Minister Hor Namhong told AFP.

Cambodia has repeatedly vowed to refuse any request from its larger neighbour to extradite Thaksin, and said in its strongly-worded letter that charges levelled against him were "politically motivated".

"The condemnation of Thaksin Shinawatra is logically the consequence of the military coup d'etat in September 2006 which resulted in his removal from the post of prime minister, while he was overwhelmingly and democratically elected by the Thai people," said the Cambodian letter, obtained AFP.

In Bangkok, the foreign ministry confirmed that it had received a copy of the Cambodian letter. "Our legal experts are examining their reasons for rejection in detail," said spokesman Vimon Kidchob.

Tensions are already running high between the two countries following a series of clashes over a temple on their border and the row threatens to mar a weekend summit of Southeast Asian leaders with US President Barack Obama.

Thailand and Cambodia recalled their ambassadors last week after Thaksin's appointment, and this week the Thai cabinet agreed to cancel an oil and gas exploration deal with Cambodia signed under Thaksin. Related article: Thaksin visit could push Thailand and Cambodia to war, say analysts

Thai Prime Minister Abhisit Vejjajiva has threatened to tear up the extradition treaty with Cambodia if it refuses to send Thaksin home.

Thaksin is due to give a speech to 300 Cambodian economics experts on Thursday. Cambodian officials have said he will stay in the country for two or three days but is not intending to live there.

On micro-messaging website Twitter, Thaksin said Wednesday he would "discuss with Hun Sen about Cambodia's problems and its relations with Thailand, to improve understanding and find mutual ways to benefit our two countries".

Twice-elected Thaksin fled Thailand in August 2008, a month before a court sentenced him to two years in jail in a conflict of interest case. He had returned to Thailand just months earlier for the first time since the coup.

But he has retained huge influence in Thailand by stirring up protests against the current Thai government, and analysts say that in his close friend Hun Sen he had found a new way of pushing his campaign for a return to power.

Thailand's government upped the pressure on Thaksin this week by accusing him of offending the revered monarchy after he was quoted by the website of British newspaper The Times as calling for reform of royal institutions.

Defaming the monarchy, led by 81-year-old King Bhumibol Adulyadej, is a crime punishable by up to 15 years in jail in Thailand.

Cambodian state television late Tuesday showed Thaksin and Hun Sen embracing, reporting that the Cambodian leader pronounced him an "eternal friend".

Cambodia and Thailand have fought several deadly skirmishes over the 11th-century Preah Vihear temple on their border since it was granted UNESCO World Heritage Status in July 2008.

Despite the escalating diplomatic row, the mood remained calm at the frontier and Phnom Penh withdrew an elite paratrooper unit from the area Wednesday morning, a Cambodian commander said.