THE escalating row between Thailand and Cambodia grew more ominous today with the takeover by Cambodia of a Thai-operated air traffic control company at the centre of spying allegations.

Cambodia's government has appointed a senior Civil Aviation official as temporary caretaker for Cambodia Air Traffic Services (CATS), a wholly owned unit of Thailand's Samart Corporation, Samart was reported as revealing through Reuters news agency.

All Thai expatriates at the company have been banned from performing their duties, it added.

The tourist industry on Phuket and throughout Thailand can only suffer further damage if the war of words betweeen the two neighboring countries escalates.

The takeover comes as Cambodia continues to pursue a policy of embracing Thaksin Shinawatra, the former Thai Prime Minister who has been sentenced to two years in jail in his absence for corruption.

Thaksin's appointment by Cambodian PM Hun Sen as an economic adviser and his visit last week in that capacity has strained the already-tense relations between the two countries.

A Thai engineer working for CATS has been accused of sending Thaksin's flight schedule to a Thai diplomat and violating Cambodian national security laws.

In a tit-for-tat exchange over the Thaksin appointment, Thailand and Cambodia have withdrawn respective ambassadors and a second Thai diplomat has been expelled over the spying claim.

Samart said today that it was seeking support from the Thai government on negotiating with Cambodia for the release of the 31-year-old engineer, Siwarak Chutipongse.

''Samart has been closely cooperating with the Thai government to help negotiate with the Cambodian Government for the release of Mr Siwarak and resolve this incident,'' it said in a statement to the stock exchange.

CATS provides air traffic control services with a 32-year concession under a build, cooperate and transfer arrangement with the Cambodian government.