BANGKOK, Aug 17 (Reuters) - Thailand's billionaire former Prime Minister Thaksin Shinawatra received a royal pardon shortening his parole by two weeks, his lawyer said on Saturday, a day after his daughter was elected premier by parliament.

Thaksin has been at the heart of a two-decade power struggle between the Shinawatra family and its allies on the one hand, and, on the other, a nexus of royalists, generals and old-money families that have long wielded influence over Thai governments and institutions.

After a dramatic return last August from self-exile to avoid jail time in the wake of his overthrow in a 2006 military coup, Thaksin served six months in hospital detention, due to health reasons, before being released on parole in February.

After his return, he was sentenced to eight years in prison for abuse of power and conflicts of interests during his time in office from 2001 to 2006. His sentence was commutedto one year by King Maha Vajiralongkorn last September.

"Thaksin is among the prisoners that received the royal pardon" for prisoners in honour of the king's birthday last month, his lawyer, Winyat Chartmontri, told Reuters. "It will take effect on Sunday."

Parole, granted in February, was due to end at the end of the month, but was shortened to Sunday as part of the royal pardon, Winyat said.

Thaksin's daughter Paetongtarn Shinawatra, 37, was elected on Friday as Thailand's second female prime minister and the third Shinawatra to hold the office, winning with nearly two-thirds of the Thai parliament.

Thaksin ally Srettha Thavisin was dismissed as prime minister on Wednesday by the Constitutional Court for ethics violations, setting up the vote for Thaksin's daughter.

Thaksin's sister, Yingluck Shinawatra, was prime minister from 2011 to 2014.

Photo from Reuters