Thai prosecutors on Tuesday formally indicted influential former prime minister Thaksin Shinawatra under the kingdom's strict royal insult laws over comments he made nearly a decade ago.

Thaksin, a powerful backer of the ruling government, was granted bail and avoided pre-trial detention for allegedly insulting the monarchy in a 2015 interview.

The billionaire sought bail from the Criminal Court of Thailand soon after the Attorney-General had formally charged him under Thailand's lese-majeste law, which carries a maximum jail sentence of up to 15 years for each perceived royal insult.

Thaksin denies the charges against him.

"The court has released Thaksin on bail of 500,000 baht under the condition that he is prohibited from leaving the country unless granted permission," a court statement said.

A former policeman who went into the telecoms business and then entered politics, Thaksin returned to Thailand last year after 15 years in self-imposed exile following his ouster from power by a military coup in 2006.

Thaksin's was the first of four high-profile cases involving key political players that were before the courts on Tuesday, in the latest legal wrangling that could see Southeast Asia's second-largest economy plunged into a new period of uncertainty.

The cases involve some of Thailand's most powerful politicians, including its current prime minister, and could deepen a decades-old rift between the conservative-royalist establishment and its opponents, such as the populist ruling Pheu Thai party and the opposition Move Forward party. (Agencies)