An autumn election is being considered by Gordon Brown in the wake of opinion polls giving Labour a boost, despite the Northern Rock crisis.
The Prime Minister kept open the option of a snap poll yesterday when a political session of the Cabinet without civil servants present discussed next week's Labour conference in Bournemouth.
The meeting was shown private Labour polling suggesting that the party is about eight points ahead of the Conservatives. The lead is smaller in the key marginal seats that will decide the election, but is still big enough to suggest a comfortable Labour majority. Mr Brown has asked Labour officials to take soundings among MPs in marginal constituencies before making his final judgement.
Mr Brown is considering several options. He could announce an election as early as next Monday, when he addresses the Labour conference. Alternatively, he could make clear that he has decided against a poll this year to prevent the event being overshadowed by election fever.
Another idea favoured by some aides is for the Prime Minister to say nothing about the election next week, but to test the temperature of the party before making his mind up. He could then wrong-foot the Tories by announcing the election before or during their Blackpool conference the following week.
Most ministers believe that an election is more likely next May than next month, but some advisers are urging Mr Brown to call an autumn election.
Two polls published this week have showed Labour's position strengthening. A ComRes survey for The Independent gave Labour a three-point lead, while an ICM poll in yesterday's Guardian put the party eight points ahead of the Conservatives.
Speculation about an early election was also fuelled by a Populus survey for The Times suggesting that most people do not blame the Government for the Northern Rock affair and that Labour's lead over the Tories on economic competence has widened.
Mr Brown told the Cabinet yesterday that he was confident of defeating the Conservatives. "We have shown we can run the country," he said. "Now our challenge next week is to demonstrate how we are changing the country."
Labour's election co-ordinator, Douglas Alexander, the International Development Secretary, said the three key issues at the conference would be crime, health and schools. "These will be the priorities for conference. Talking about the issues that matter to the country, not talking among ourselves as we have in the past. A government looking forward with confidence and strength to a decade of great challenges and change," he said.
There was gloom among Tory MPs after the ICM poll suggested that David Cameron was less popular than Mr Brown or Sir Menzies Campbell, the Liberal Democrat leader.
But the Tories insist they are running Labour close in the marginals, where they are channelling their efforts in a campaign led by Lord Ashcroft, a deputy party chairman.
The Tories also hope that the public's final verdict on the problems at Northern Rock may be less favourable to the Government.
Mr Brown was accused yesterday of "control freakery" after it emerged that large numbers of motions submitted to the conference have been ruled out of order. Of 120 contemporary resolutions submitted by constituency parties and unions, 96 were ruled out of order by the Conference Arrangements Committee. They include motions on Iraq and the Trident nuclear weapons system.
John McDonnell, the Labour MP for Hayes and Harlington, said: "This closing down of debate within the Labour Party by Brown's imposition of such centralised control is cutting him off from the debates of party members and the concerns of the population at large."