By Patpicha Tanakasempipat and Panarat Thepgumpanat

BANGKOK (Reuters) - Thailand's election commission said on Wednesday it is seeking the disqualification of a party that nominated a princess for prime minister, in what would be a set-back for the opposition loyal to ousted former prime minister Thaksin Shinawatra.

Thailand will hold a general election on March 24, its first since a military coup in 2014. The contest looks set to be a showdown between the military-backed, royalist Prime Minister Prayuth Chan-ocha and supporters of Thaksin.

Last week, a party allied with Thaksin said its candidate for prime minister, if it won the election, would be Princess Ubolratana Rajakanya Sirivadhana Barnavadi, the king's older sister.

The announcement caused a sensation in a country where the royal family has traditionally remained above politics.

Hours later, King Maha Vajiralongkorn made clear his opposition to his older sister's political foray, calling it "inappropriate" and unconstitutional.

Thailand has been a constitutional monarchy since 1932, but the royal family wields great influence and commands widespread devotion, with the king considered to be semi-divine.

The election commission disqualified the princess on Monday and on Wednesday said it also aimed to dissolve the Thai Raksa Chart party, which nominated her.

The party was one of several set up by Thaksin loyalists as back-up parties in case his main Pheu Thai party is disqualified for some reason.

The election commission said in a statement the Thai Raksa Chart party had violated an electoral law with its nomination of the king's sister, which was "antagonistic towards the constitutional monarchy".

"Therefore, it is agreed that a petition will be submitted to the Constitutional Court to consider dissolving the Thai Raksa Chart Party," it said in a statement.

Thai Raksa Chart officials told reporters the party did not violate the electoral law and it would ask the Constitutional Court to be "merciful".

The court said it would decide on Thursday whether or not to accept the case.

If found guilty, the party would be dissolved, and its board members banned from standing for political office.

Parties loyal to Thaksin, a former telecommunications tycoon, have defeated pro-establishment parties to win every election since 2001.

'SORRY'

Ubolratana apologised on Tuesday for causing "problems" for the people.

"I am sorry my genuine intention to work for the country and Thai people has caused such problems that shouldn't have happened in this era," she said on Instagram.

Ubolratana relinquished her royal titles in 1972 when she married Peter Jensen, an American and fellow student at the Massachusetts Institute of Technology. She lived in the United States for more than 26 years before they divorced in 1998.

Some social media users urged her to serve the people as a member of the royal family, but Ubolratana responded: "I don't want to be in that position anymore. I gave that up a long time ago."

The March poll is shaping up to be the latest confrontation in nearly 15 years of political conflict between the mostly Bangkok-based royalist-military elite and the largely rural-based populist movement backed by Thaksin - marked by street protests, violent clashes and military coups.

On Wednesday, the Supreme Court upheld eight-month jail sentences for six pro-establishment activists who led an occupation of the prime minister's offices in 2008, during months-long protests against a pro-Thaksin government.

The six leaders of the People's Alliance for Democracy (PAD), including media mogul Sondhi Limthongkul and retired general and former Bangkok governor Chamlong Srimuang, had appealed two-year prison terms issued by a lower court in 2015.

The Supreme Court upheld their convictions for encroachment and damage to public property, but dropped charges of treason and disturbing public peace, said their lawyer Suwat Apaipak.

PAD protesters seized Government House for 193 days and laid siege to many government offices and parliament. They also shut down Bangkok's two main international airports for more than a week during the 2008 protests against a pro-Thaksin government.

(Additional reporting by Panu Wongcha-um; Writing by Kanupriya Kapoor; Editing by Robert Birsel and Darren Schuettler)

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