Boris Johnson is hosting an unscheduled meeting of his Cabinet amid increasing speculation he is about to call an early general election.
It is understood the PM is planning to trigger a snap election if he loses a vote on a no-deal Brexit in the House of Commons this week.
If MPs vote vote for an election the UK will then go to the polls before the 31 October Brexit deadline.
The BBC reported that “live discussions” are continuing inside Number 10 about asking Parliament to approve a snap general election as soon as Wednesday.
It comes as Tory rebel MPs planning to try and block a no-deal Brexit in Parliament this week were warned they would be sacked from the Conservative Party and blocked from standing to be party MPs in an election.
Rebels are seeking to force the PM to delay Brexit by three months if he fails to secure a deal by 31 October, according to the BBC’s Laura Kuenssberg.
Mr Johnson has promised Britain will leave the EU on October 31 with or without a deal.
Downing Street warned MPs it would be "entirely unreasonable" for them to attempt to "bind the hands" of the prime minister as he seeks to negotiate a new Brexit deal.
Monday afternoon’s surprise Cabinet meeting has sparked feverish speculation about the prospect of a general election being called within days if the government loses the expected Commons vote this week.
Number 10 has said the no-deal vote is "an expression of confidence in government's negotiating position to secure a deal and will be treated as such".
A Downing Street spokesman earlier told a Westminster briefing that the UK would leave the EU "whatever the circumstances" on October 31.
He added: "The prime minister has said from the start that he will be energetic in pursuit of a deal.
“We have put forward reasonable proposals and the PM and his team have been discussing these with EU leaders and the commission over the summer recess.
"It would be entirely unreasonable for MPs - having rejected the previous deal three times - to attempt to bind the hands of the prime minister as he seeks to negotiate a deal they can support ahead of EU Council in October."
Labour leader Jeremy Corbyn, who has consistently called for an early general election, said: "We have a prime minister who hasn't won an election and who doesn't have a majority.
“When he decrees that parliament will be shut down because his plan for No Deal doesn't have the votes, we say that is an attack on democracy which will be resisted."
Earlier, Mr Johnson was accused of "goading" some Tory MPs to rebel so he can force a snap general election having purged opponents of a no-deal Brexit from the party.
Conservative David Gauke, the former justice secretary and rebel ringleader, accused Mr Johnson of deliberately trying to lose votes to block a deal-less departure this week.
MPs are being warned to back the government when Remainers and those who want to leave the European Union with a deal attempt to seize control of the parliamentary agenda on Tuesday.
They will try to pass legislation to prevent leaving the European Union without an agreement in place.