The news came as the legislature prepared to vote on whether to impeach her for dereliction of duty over the same scheme. Critics say the rice policy cost the government billions and funnelled money to her party's power base.

Ms Yingluck was removed from office in May 2014 just before a military coup. Her supporters say the claims against her are a ruse to remove her from politics.

Ms Yingluck's party is the most popular in Thailand and has - under various different names - won every election since 2001.

Surasak Threerattrakul, Director-General of the Office of the Attorney General, said after considering all the witnesses and evidence from the National Anti-Corruption Committee "we agree that the case substantiates a criminal indictment charge against Yingluck". If found guilty, she could be jailed for up to 10 years. If the military-backed legislature also votes to impeach her she will be immediately banned from politics for five years.

The BBC's Jonathan Head in Bangkok says the criminal charges on the same day as the vote are a clear indication that Thailand's military rulers have decided she must be removed from any future role in politics.