Deputy Prime Minister Prawit Wongsuwon said on Monday people can stage rallies and express their opinions, as long as they do not infringe on the rights of other people.
He also acknowledged that the constitution needs amending.
Gen Prawit was speaking at Government House in response to reporters' questions about the mass anti-government demonstration by the Free People group at the Democracy Monument in Bangkok on Sunday night.
The demonstrators issued a statement calling on the government to set up a constitution-drafting committee to write a new constitution based on the will of the people, and to stop harassing individuals exercising their democratic rights.
They also demanded the government dissolve parliament.
The demonstrators said they would lift their anti-government movement to a higher level if their three-point demand was not met.
Gen Prawit said the protesters can express their opinions, which may be different from others', as long as they do not infringe on the rights of other people.
"The government is duty-bound to provide security for the demonstrators," he said.
Asked why the government had not done anything, since the gathering contravened the emergency decree, which is still in force, Gen Prawit retorted: "What can we do?"
Asked how he felt about seeing such a large number of anti-government demonstrators on Sunday night, Gen Prawit declined to answer and walked away.
In a subsequent interview, Gen Prawit said his Palang Pracharath Party was ready for constitutional amendment and party members would propose changes through its executive board.
"It must be amended," Gen Prawit said, referring to the constitution.