Mrs May has reportedly decided to delay the crunch session in the House of Commons tomorrow on her Brexit deal with the EU.
It was due to give MPs a “meaningful vote” on the final decision on Brexit.
The PM is looking to secure support for her controversial deal – the Brexit Withdrawal Agreement – to push it through the Commons.
Her future as Prime Minister is tied to the success of the deal which is expected to be voted down by Labour, Mrs May's allies the DUP, and rebel Tory MPs.
The cancellation was confirmed by multiple sources less than an hour after Downing Street claimed the “vote is going ahead as planned”.
“Theresa May is looking weaker by the minute. Surely its only a matter of time?”
Mrs May is due to give a speech in the House of Commons at 3.30pm – titled “Exiting the EU”.
It is then followed by the Leader of the House, Andrea Leadsom, giving a “business statement” and then Brexit secretary Stephen Barclay addressing this mornings ECJ decision on Article 50.
Downing Street head said that Mrs May intended to go ahead with the vote on the deal on Tuesday as planned, in a statement released before the flurry of speculation.
It came as the PM reportedly held an “emergency call” with Cabinet ministers.
The spokeswoman said Mrs May was updating her team on her weekend calls with EU leaders, including Donald Tusk, Jean-Claude Juncker, Leo Varadkar and Dutch prime minister Mark Rutte in a conference call.
Asked if the Prime Minister was confident of winning the vote, the spokeswoman said: "Yes.”
She added: "The Prime Minister has always said that this is the right deal and the best deal available and MPs should support it."
PRIME MINISTERS: Are Theresa May's days numbered as she flounders on Brexit? (Pic: AFP)
Britain remains bitterly divided over Brexit following the vote to leave the EU back in June 2016 – which finished 48% to 52% in favour of Leave.
Mrs May is attempting to push through her compromise deal, which has been criticsed for leaving Britain too closely tied to EU.
Campaigners are calling for a People's Vote to give the public a final say on Brexit, including the option to stay in the European Union.
Fears loom over a "no-deal" situation which would see Britain crash out of the EU on March 29 – potentially causing chaos and shortages.
DIVIDED: Britain remains bitterly split over Brexit as Theresa May tries to secure her deal (Pic: EPA) Related Articles
FUDGE: Protestors mock Theresa May outside the House of Commons (Pic: EPA)
The pound fell sharply in response, shedding 0.5% versus the US dollar to stand at 1.26. Against the euro, the pound was 0.8% down.
Mrs May's hastily-arranged oral statement is widely expected to confirm that she intends to seek further concessions from Brussels to try to win over rebellious backbenchers.
Remainer Tory former minister Anna Soubry said on Twitter: "I gravely fear we are putting off the inevitable. We were told the PMs deal was the final deal and end of negotiations.
"What can we believe? I also fear PM has weakened her own position and the European Research Group [ERG] will put in letters."
NUMBER 10: Downing Street has been embattled from all side over Brexit (Pic: AFP)
Labour leader Jeremy Corbyn said: "The Government has decided Theresa Mays Brexit deal is so disastrous that it has taken the desperate step of delaying its own vote at the eleventh hour.
“We have known for at least two weeks that Theresa Mays worst of all worlds deal was going to be rejected by Parliament because it is damaging for Britain.
"Instead, she ploughed ahead when she should have gone back to Brussels to renegotiate or called an election so the public could elect a new government that could do so.
“We dont have a functioning government. While Theresa May continues to botch Brexit, our public services are at breaking point and our communities suffer from dire under-investment.
“Labours alternative plan for a jobs first deal must take centre stage in any future talks with Brussels.”
INTO THE FIRE: Theresa May returns to Downing Street to face her MPs (Pic: REUTERS)
Jacob Rees-Mogg's powerful cabal the European Research Group (ERG) had already attempted to unseat Mrs May last month in protest over Brexit.
ERG organiser Steve Baker MP said: "The meaningful vote is postponed: This is essentially a defeat of the Prime Ministers Brexit deal.
"The terms of the WA were so bad that they didnt dare put it to Parliament for a vote.
"This isnt the mark of a stable government or a strong plan."
CHAOS: Theresa May's future as PM is now tied to Brexit (Pic: GETTY)
Brexiteer-in-chief Nigel Farage, who last week quit UKIP, tweeted: "Theresa May is looking weaker by the minute. Surely its only a matter of time?"
Thousands attended the "Brexit Betrayal" march at the weekend – led by far-right activist Tommy Robinson – as anger grows over the government's handling of the exit from the EU.
Environment secretary Michael Gove warned "alternatives to supporting this deal are either potentially no Brexit" and foreign secretary Jeremy Hunt "there are real risks if we don't grab this opportunity".
Mrs May's latest blow comes after the European Court of Justice ruled Britain can revoke Article 50 and stay in the EU without permission of the other 27 member states.