The progressive Move Forward was the surprise winner of the May 14 election, closely followed by Pheu Thai, after the two trounced conservative parties in a resounding rejection of nine years of government led or backed by the military.

An alliance between them collapsed after a bicameral parliament over which the royalist military commands significant influence rejected Move Forward leader Pita Limjaroenrat's prime ministerial bid twice last month.

Thailand has been under a caretaker government for five months and Move Forward's refusal to back Pheu Thai could prolong months of political uncertainty exacerbated by the parliamentary deadlock.

"The formation of government now is not reflective of the people's voice ... and distorts the will of the people in the elections," Move Forward secretary general Chaithawat Tulathon told a news conference.

Political veteran Pheu Thai has been accused by critics of outmanoeuvring Move Forward to ensure it leads the government.

Pheu Thai insists it only withdrew its support when it was clear that Move Forward could not win the backing of the legislature, where it encountered resistance to its liberal, anti-establishment agenda.

Despite Pheu Thai's bitter history with the military, it has been lobbying hard for the support of parties and senators allied with generals involved in 2006 and 2014 coups against its governments.

"We do not want to have any part in the formation of government under these conditions," Move Forward's Chaithawat said.

Pheu Thai will nominate for prime minister Srettha Thavisin, a former real estate mogul with no political experience up until the election. To succeed, Srettha needs support from more than half of the joint lower and upper houses, an outcome far from certain.

Pheu Thai leader Cholnan Srikaew said he expected a prime ministerial vote between Aug. 18 and Aug. 22 and he was confident Srettha could still prevail without Move Forward's support.

"We respect Move Forward's decision and we are able to work with all parties," he said.