When Cambodia's co-defence ministers met breakaway Khmer Rouge leader Ieng Sary for landmark peace talks this month, few observers were surprised that the venue was Thailand. The decision was spearheaded by the Thai Defence Minister and Deputy Prime Minister Chavalit Yongchaiyudh. The participants were taxied around by Thai military and they reportedly met in the house of a retired Thai general. These events have been interpreted by many as proof that Bangkok has ceased support for the Khmer Rouge. But profits not politics are the decisive factor behind this change in heart, in particular the multi-million dollar border trade in timber, which is now up for grabs in peace talks between Ieng Sary and the Cambodian Government. Thailand played a vital role in supporting Pol Pot's Khmer Rouge guerillas after their overthrow by invading Vietnamese forces in 1979. Although this formally ceased after the signing of the Paris Peace Accord in 1991, most observers agree that Thailand, or at least its generals, continued to help the Khmer Rouge. Evidence of this was the frequent pictures in the Thai press showing plain-clothes Thai officers drinking with Khmer Rouge officials. In 1994, the US Congress passed a law calling for tough sanctions against countries helping the Khmer Rouge, amended in 1995 to include commercial ties, a clause specially aimed at the Thai military and its border trade with the organisation. 'Thailand has been forced to make a choice: either continue to deal with the Khmer Rouge or terminate this in favour of the Government,' said one Cambodian analyst. 'With Cambodia's upcoming entry into ASEAN [the Association of Southeast Asian Nations], and the declining strength of the Khmer Rouge, this is not much of a choice at all,' he said. Diplomats in Phnom Penh cite the Khmer Rouge's shortages of ammunition, food and medicine as evidence that the Thais are serious in switching their allegiance, and say it may have been an important factor in Ieng Sary's growing disillusionment with the movement. They believe the split also provides a chance to legalise its border trade with the guerillas. Earlier this year, the British environmental group Global Witness revealed a secret deal under which 16 Thai companies were allowed to export a million cubic metres of old and pre-cut timber. The deal, signed by Co-Prime Ministers Prince Norodom Ranariddh and Hun Sen, was called off following revelations that much of the timber was actually new or had not yet been cut. The Cambodian flag flew over the former Khmer Rouge base of Pailin for the first time in more than two years yesterday as breakaway rebel leaders and government commanders met to discuss integrating the renegades into Phnom Penh's fold. The faction reportedly demanded several top posts in the royal army and continued possession of the gem-rich region under the faction's control. King Norodom Sihanouk said co-premiers Prince Norodom Rannaridh and Hun Sen violated his wishes by announcing he had pardoned Ieng Sary before Parliament approved it.