The Muslim politicians of the Wadah faction, which helped the Pheu Thai Party earn votes in the far South in the past, have all defected from the party.
They did not follow other key figures in confirming their membership, as required by the military regime, and have now left the Pheu Thai Party, a Pheu Thai source said on Saturday.
Wadah members, including former MPs and some executives at the Southern Border Provinces Administrative Centre (SBPAC), have established a new political party named the "Prachachart Party", according to a Pheu Thai member in Songkhla.
The new party is trying to persuade former MPs in the South to join it ahead of the general election, which is likely to be next February.
Former Songkhla MP Bunya Lilet, chief adviser to the Paradonphab Party, said he has also been invited to join the Prachachart Party but declined the offer.
The party is reportedly aiming to get a total of 15 seats in the South. Most of its candidates will compete in the Muslim-dominated provinces of Pattani, Yala and Narathiwat, where insurgency is still rife.
Wadah was cofounded by Pattani veteran politician Den Tomeena and Wan Muhamad Nor Matha, its former leader.
Mr Wan Nor's group joined the now-defunct Thai Rak Thai Party in 2002 and he was appointed as an interior minister in the Thaksin Shinawatra administration.
After a coup which overthrew the Thaksin government in 2006, Thai Rak Thai was dissolved by the Constitutional Tribunal for violating an electoral law during that year's election.
The party's 111 members, including Mr Wan Nor, were banned from participating in politics for five years.
Some members of Wadah group later moved to the Pheu Thai Party, which is believed to be the reincarnation of Thai Rak Thai.
Mr Wan Nor's younger brother, and key Wadah member, Sugarno Matha earlier showed interest in leaving the Pheu Thai Party.
Mr Sugarno said the new party is also planning to bring back Wadah members who had defected in the past.
Other Wadah key members are two former Yala MPs, Phaisan Yingsaman and Burahadin Useng, and former Satun MP Chirayut Naowaket.
In another development, former Democrat MP for Bangkok Chuenchop Kongudom has decided to leave the Democrat Party to help his father's new political party "Thongthin Thai", deputy Democrat leader Ong-art Klampaibul said yesterday.
His father Chatchawan Kongudom, widely known as "Chat Taopoon", was a former Bangkok senator.
Mr Chuenchop's defection will see the Democrat Party field a new candidate in the Bang Sue area, Mr Ong-art said.