Rishi Sunak could replace Liz Truss as Prime Minister later today after Boris Johnson ruled himself out of the race for No 10.
Tory MPs will choose who they want to be their new leader in the first stage of the contest this afternoon, should both remaining candidates get the 100 nominations required to reserve a place on the ballot.
There is uncertainty over Sunak's rival Penny Mordaunt' s prospects of securing sufficient support from MPs. If she falls short of this total by the deadline of 2pm, or pulls out of the contest, Sunak will take charge of the party without the need for a vote.
It comes after Johnson dramatically withdrew from the race saying there was a "very good chance" he could have been back in No 10 by the end of the week if he had stood.
In the lead up to his statement Johnson reached out to Sunak and Mordaunt to work together in the national interest and end the Tory psychodrama.
Sunak, the former chancellor, already has more than 140 public declarations of support, while Mordaunt had fewer than 30 on Sunday night. Her team is hoping the departure of Johnson will see a swathe of MPs who were backing him or are yet to declare swing behind her.
A campaign source confirmed she was still in the running on Sunday, arguing she was the candidate who Labour feared the most.
"Penny is the unifying candidate who is most likely to keep the wings of the Conservative Party together and polling shows that she is the most likely candidate to hold on to the seats the Conservative Party gained in 2019," the source said.
Reports have stated she already has the 100 MPs required to reach the next stage of the contest which would involved a vote among Tory members.
However one senior minister who was backing Johnson - the Chancellor of the Duchy of Lancaster Nadhim Zahawi - said he would now be supporting Sunak.
"Rishi is immensely talented, will command a strong majority in the parliamentary Conservative Party, and will have my full support and loyalty," he tweeted.
Mordaunt has limited time to get the necessary nominations. If she fails, Sunak will be declared leader without a contest. If she does get the numbers, MPs will then decide which of the two candidates they prefer in an "indicative" vote.
There will then be a final online poll of party members to decide the outcome, with the result due on Friday - unless one of the candidates pulls out.
There are some in the party who would like to see an uncontested "coronation" to avoid a repeat of what happened with Liz Truss when members voted for a leader who did not have the backing of MPs.
Mordaunt could find herself under pressure to withdraw if she finishes a long way behind Sunak in the poll of MPs - should it go to a vote, even though she is popular with the Tory grassroots.
At the same time, however, many activists - many of whom loathe Sunak for his role in bringing down Johnson - will be furious if they are denied a say in the contest.
In a statement last night, Johnson said he had been "overwhelmed" by the support he had received from people urging him to run just weeks after being forced out by his own MPs after one scandal too many.
If he had stood, he said there was a "very good chance" the members would have voted him back into No 10 by the end of week and that he would have been "well-placed" to lead the party to victory in a general election in 2024.
However, he said he had come to the conclusion that "this would simply not be the right thing to do".
Sunak-supporting Tory MP Tobias Ellwood, meanwhile, dismissed calls from Labour for a general election .
"The country does not want further economic instability," the chairman of the Commons Defence Select Committee told the BBC.
"And what you'd get if there was a general election is it would not be clear as to which direction the country would go, there'd be greater upheaval, the markets would then be spooked again.
"There would probably be a run on the pound, that would see interest rates climb (and) mortgages go up as well. This isn't the leadership the country wants."
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