Former Thai prime minister Thaksin Shinawatra has been released on parole from a Bangkok hospital where he spent six months serving time for corruption-related offences.

Thaksin was seen wearing a neck support, a sling on his right arm and a surgical mask inside one of the cars in a convoy leaving the Police General Hospital just before sunrise on Sunday.

He was accompanied by his two daughters and they arrived at his residence in western Bangkok less than an hour later.

A homemade banner with the words “Welcome home” and “We’ve been waiting for this day for so, so long” was seen hanging at the front gate of his house. Thaksin and his daughters were driven straight into the compound and did not give any reaction to a throng of reporters gathered on the street.

Thaksin was accused of corruption and abuse of power during his time in office from 2001 to 2006, when he was toppled in a coup, and he remains one of the most polarising figures in Thai politics over the last two decades.

Analysts believe his release represents a drift towards reconciliation with his enemies in Thailand’s conservative elite, who saw his popularity and brash populist politics as a threat to the monarchy, which is considered a bedrock of Thai society.

Thaksin is still believed to wield huge influence and will continue to “conduct the music behind the scenes” for the ruling Pheu Thai party – led by his daughter Paetongtarn Shinawatra – but how much political power he can now exercise is unclear, said Thitinan Pongsudhirak, a professor of political science at Bangkok’s Chulalongkorn University.

Thaksin’s original eight-year sentence was commuted to only a year by King Maha Vajiralongkorn on September 1, shortly after he voluntarily returned from more than a decade of self-imposed exile.

Justice minister Tawee Sodsong confirmed the approval of Thaksin’s parole last week, saying he is in the eligible category of inmates who have serious illnesses, are disabled or are aged over 70. Thaksin is 74.

Thaksin will still have to report to parole officers every month for the remainder of his sentence and will be subject to a travel restriction, but he is not required to wear an ankle monitor due to his age and health conditions, officials have said.

But he is not yet clear of all legal hurdles. Thai officials said earlier this month they have reopened an investigation into allegations of defaming the monarchy made against Thaksin almost nine years ago. If the Office of the Attorney General decides to indict him, Thaksin could be detained again.

Thaksin arrived back in his homeland the same day Srettha Thavisin of the Pheu Thai party – the latest incarnation in a string of parties Thaksin has supported since he was removed from office – secured the post of prime minister with the support of military-linked parties.

Thaksin was sent straight to prison after his arrival but was moved almost immediately to the hospital on grounds of ill health, without spending a single night behind bars.

Opponents have charged that serving his sentence in hospital was a special privilege.

After his 2006 ousting, Thaksin’s supporters and opponents continued their struggle with violent fights in the streets, contests at the ballot box, showdowns in the courts and another coup in 2014 that ousted a government that had been formed by his sister.

Thaksin, a telecommunications billionaire who used his fortune to build a populist political party, was once considered a symbol for a different Thailand. Parties he has controlled polled first in every general election until last year, when a more progressive rival topped the field.

The Move Forward party’s unexpected win pointed to a strong mandate from voters for real structural change in Thai politics, and its reformist policy proposals alarmed the conservative forces more than Pheu Thai ever did.