Thailand's acting prime minister has moved to dissolve parliament, his party said on Wednesday, after the largest opposition party backed a rival candidate for prime minister.

Prime minister Paetongtarn Shinawatra was ousted last week by the Constitutional Court, leaving a power vacuum in the kingdom's top office.

Her Pheu Thai party -- still governing in a caretaker capacity -- was jostling for support from the largest opposition bloc the People's Party to confirm a new candidate for prime minister.

But just moments after the People's Party announced their crucial backing for a rival candidate, conservative tycoon Anutin Charnvirakul, Pheu Thai said they would seek to dissolve parliament.

Pheu Thai Secretary General Sorawong Thienthong told reporters that acting Prime Minister Phumtham Wechayachai "had submitted a house dissolution decree". (AFP)