Two senior members of Mrs Mays Downing Street team are said to be “war-gaming” after the Prime Minister was humiliated by EU officials in Salzburg.
Donald Tusk, President of the European council, said her Chequers deal "will not work" and risked "undermining the single market".
According to the Sunday Times, one senior Tory strategist said to another: “What are you doing in November — because I think we are going to need an election.”
The paper also reports another member of her inner circle has told cabinet ministers she is likely to stand down next summer — a move designed to stop them resigning now to replace her.
“ The message to the Brexiteers is: if you want to sort out Brexit later you might get that opportunity once she's gone.”
A senior Tory source said: "The idea is: back her now and then we will clear the way for a leadership contest after that.
“And the message to the Brexiteers is: if you want to sort out Brexit later you might get that opportunity once she's gone."
The news comes as Labour leader Jeremy Corbyn reiterated calls for another election – and promised to back a second referendum on Europe if Labour members want one.
The Opposition leader – a longstanding opponent of the EU – said he was not calling for a second vote himself but would accept the will of the party.
SNAP: Downing Street officials are said to be 'war-gaming' for another election
He told the Mirror: "What comes out of conference I will adhere to.
“But Im not calling for a second referendum. I hope we will agree that the best way of resolving this is a General Election.
“But I was elected to empower the members of the party. So if conference makes a decision I will not walk away from it and I will act accordingly.”