Tory rebels successful managed to stage a no-confidence vote in Mrs May, which could see her ousted tonight by 9pm.
Downing Street officials have now hinted the PM will resign.
Her spokesman suggested Mrs May will stay on as Prime Minister until after Brexit, but wont fight the next General Election.
Mrs May cancelled the “meaningful vote” on her Brexit deal from the House of Commons yesterday – setting the current challenge to her leadership in motion.
“This vote today is not about who leads the party in the next general election”
Senior Tories believe Mrs May will win the vote tonight – but she is expected to announce that she wont contest the next General Election.
Tallies indicate 158 Conservatives have pledged to support the PM, which would secure her victory in the no-confidene vote.
Environment secretary Michael Gove said he expects May to win the vote, as did pensions secretary Amber Rudd.
The attempted coup has been staged by Brexit-supporting backbenchers who accuse Mrs Mays deal of leaving Britain too closely tied to the EU.
THERESA MAY: The Prime Minister has hinted she will resign – but not until after Brexit (Pic: PA)
"This vote today is not about who leads the party in the next general election,” her political spokesman said.
Mrs May pledged to fight against the vote as she issued a defiant statement this morning on the steps of Downing Street.
She then endured a clash with Labour leader Jeremy Corbyn in which she once again set out her stall on Brexit.
The PM took the opportunity to remind the Conservatives of the possibility of a Labour government as the opposition pushes for a General Election.
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DOWNING STREET: Theresa May heads to the House of Commons for what could be her last PMQs (Pic: PA) Related Articles
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Speaking this morning, Mrs May said: "A change of leadership in the Conservative Party now will put our countrys future at risk and create uncertainty when we can least afford it.
"The new leader wouldnt have time to renegotiate a withdrawal agreement and get the legislation through Parliament by the 29th of March, so one of their first acts would have to be extending or rescinding Article 50, delaying or even stopping Brexit when people want us to get on with it.”
She added: "Weeks spent tearing ourselves apart will only create more division, just as we should be standing together to serve our country. None of that would be in the national interest.
“The only people whose interests would be served are Jeremy Corbyn and John McDonnell.”
International Trade Secretary Liam Fox said he thought the Prime Minister would win the vote on Wednesday night.
And he told BBC Radio 4's World At One: "It seems to me that this is the only potential deal that can get through the House of Commons if we can get past the worries that some of my colleagues have about the backstop, but if that can be dealt with it's got to be the only way through."
Bookies odds have Dominic Raab, Boris Johnson and Sajid Javid as the most possible contenders should Mrs May be ousted tonight.
Britain faces the prospect of having a new Prime Minister with just 107 days before the country risks crashing out the EU.