Labour is braced for its most disastrous election showing since 1918 as the Cabinet prepares to tell Gordon Brown to quit next week.
A Daily Mail poll reveals Labour support has crashed to 24 per cent following the Prime Minister's 'bigot' gaffe and his lacklustre performance in the final TV debate.
But it provides cold comfort for David Cameron - putting his party on 33 per cent, just one ahead of the Liberal Democrats.
The findings suggest Britain is firmly on course for the paralysis of a hung Parliament - even though a majority of voters believe that outcome will be bad for the country and the economy.
Labour is in mortal danger, threatened with performing worse than Michael Foot did in 1983's wipeout, when he polled 27 per cent of the vote.
A share of 24 per cent would represent the party's worst showing in 92 years.
Mr Cameron tried to seal the deal with the electorate last night by issuing a 'contract' setting out key pledges - including cleaning up Westminster, slashing ministers' pay, the size of the Commons and Whitehall waste, reducing immigration and protecting the NHS.
But his hopes of a Commons majority remain in serious jeopardy thanks to Lib Dem leader Nick Clegg, who last night declared the election a 'two-horse race' with Labour already beaten.
In a sign of Labour's growing desperation, a suntanned Tony Blair, who has spent most of the election campaign on holiday or earning money on the lecture circuit, was wheeled out to try to shore up support.
Addressing activists after visiting what should be a rock-solid Labour seat in north-west London, he said: 'This Lib Demmery has to stop. If it is possible to be profoundly vacuous, that is what they are.'
He was forced to deny that Mr Brown had been a 'failure' as Prime Minister and said he did not expect Labour to gain fewer votes than the Lib Dems, despite a series of polls putting it in third.
However, in a further body blow to the party, the traditionally Labour-supporting Guardian newspaper today comes out in favour of the Liberal Democrats.
While Mr Brown insisted he would fight to 'the very last second', Labour sources say Business Secretary Lord Mandelson, Home Secretary Alan Johnson and Defence Secretary Bob Ainsworth are preparing to back a leadership bid by Foreign Secretary David Miliband after a defeat on May 6.
There is growing support for Chancellor Alistair Darling - rather than the party's deputy leader Harriet Harman - to take over as a 'caretaker' leader while a permanent successor is chosen.
Last night Mr Darling insisted he had 'no ambitions at all, not even for a few minutes' of becoming prime minister.
Schools Secretary Ed Balls, Mr Brown's closest Cabinet ally, is expected to mount a challenge to the Blairite Mr Miliband.
The fiasco of the Prime Minister's encounter with Labour-supporting grandmother Gillian Duffy - whom he was overheard calling a 'bigot' - has cemented a view in Labour circles that Mr Brown cannot stay on as leader. 'It will be quick, as much for his sake as anything else,' one Labour veteran was quoted as saying.
Another Labour insider said: 'Gordon will not be able to carry on if we poll below 30 per cent. It just won't be tenable.'
A large majority of voters in today's Harris poll - 66 per cent - agree Mr Brown should not remain Prime Minister, even if Labour wins the most seats but falls short of a Commons majority.
Overall, the Tories are down one point on last week, on 33 per cent, the Lib Dems up three on 32 and Labour down two on 24.
The findings will be a blow to Mr Cameron, who had hoped his success in Thursday night's TV debate would translate into an immediate poll bounce.
However, he is judged by 31 per cent to be the best potential prime minister, with Mr Clegg on 25 and Mr Brown on just 21.
The Tory leader is also seen as the most effective in managing the economy, with 33 per cent backing him against 30 for Mr Brown and just 17 for Mr Clegg.
One of the most startling findings is that large numbers of voters believe a hung Parliament will be bad for Britain - but many still say they intend to vote Lib Dem.
Some 48 per cent say a hung Parliament would fail to tackle government debt, 48 per cent say it would be weak and indecisive, 46 per cent disagree that it would be a good thing and 50 per cent disagree that it would strengthen international confidence in Britain.
Most voters do not want the Lib Dems to join forces with either of the two main parties - with 38 per cent saying they should instead vote on each issue in Parliament as it comes up. Some 26 per cent say they should join a coalition with or support a Labour minority government, almost the same as the 25 per cent who say they should prop up the Tories.
Business leaders have issued a fresh warning that a hung Parliament would be bad for the economy and stifle growth.
A poll of 300 heads of firms by BDRC Continental on behalf of financial channel CNBC found that 77 per cent fear turmoil if there is no decisive result next week.
ANALYSIS: Tories must play on the Fear Factor
by ANTHONY KING
Party leaders make less difference to the outcomes of most British elections than people suppose. Winston Churchill was the man who won the war in 1945 but lost the general election that same year.
Jim Callaghan was bookies' favourite to remain Prime Minister in 1979, but Margaret Thatcher's Tories won decisively.
Policies rather than personalities are normally what sway most voters.
But 2010 looks like being an exception. Labour would probably have lost anyway because of its recent record in office, but Gordon Brown has almost certainly nailed the lid on his party's coffin.
Indeed things are so desperate for Labour that next Thursday it could well finish third.
There is no precedent in British history for a governing party being thus humiliated.
Not only does Labour trail the Tories by nine points according to the Daily Mail's latest Harris poll, but a mere 21 per cent of voters think Gordon Brown would make the best prime minister. In fact a large majority reckon that, even if Labour is the largest party in the next Parliament, he should definitely depart Downing Street.
To compound the misery, his rude remarks about Gillian Duffy on Wednesday - calling her a bigoted woman for raising concerns about mass immigration - undoubtedly did immense damage to what was left of his personal reputation.
Fully one in three of Harris's respondents feels 'less favourable' towards the Prime Minister than before the incident.
This leaves the Conservatives in a position at once formidable and frustrating.
It is formidable because they seem certain to emerge from the election with more Commons seats than any other party.
On a uniform swing across the country, Harris's voting-intention figures give the Tories 265 seats in the new parliament compared with only 222 for Labour.
If, as some polls suggest, they are doing particularly well in marginals, that lead could well be higher.
But their position is frustrating because such numbers leave them well short of an overall majority and point to a hung parliament in which a David Cameron-led government would be forced to rely on the votes of Liberal Democrat MPs to remain in power.
At the very least, Mr Cameron might find himself having to concede a referendum on proportional representation as a means of guaranteeing Lib Dem parliamentary support.
To clinch an overall majority and free themselves from dependence on the Lib Dems, the Tories need both to squeeze Nick Clegg's party between now and next Thursday and further widen the gap between themselves and Labour.
If the Tories could somehow edge upwards from their present 33 per cent to 37 per cent, and if support for both the Lib Dems and especially Labour fell back, Mr Cameron could still win an overall majority - but his majority would be tiny and, like John Major's in 1992, potentially precarious.
The stance of Lib Dem voters is paradoxical.
They evidently remain unconvinced by David Cameron's liberal and centrist credentials.
The fine print of Harris's findings suggests that Lib Dem supporters, although they despair of Gordon Brown, still remain more inclined to Labour than the Tories.
However, at the same time a substantial proportion of Lib Dem supporters are clearly unsettled by the prospect of a hung parliament.
According to Harris, nearly one-third of Lib Dem voters fear a coalition or minority government would be 'weak and indecisive' and that such a government 'would fail to tackle the government's enormous deficit'.
So the Tories' best tactic during the final days of the campaign could well be to play on the widespread fear among the electorate - including potential Lib Dem voters - of the political and financial chaos that could result from an indeterminate election outcome.
Source : dailymail