Britain's Observer newspaper reported that Prime Minister Keir Starmer is expected to resign on Monday and outline a timetable for his departure.
However, Business Minister Peter Kyle said on Sunday that he had no reason to believe Starmer was planning to announce his resignation.
Kyle said he had held a "frank" conversation with Starmer on Friday, adding that the prime minister remained focused on governing.
Pressure on Starmer, which has been mounting for months, intensified on Friday after his rival, Andy Burnham, won a parliamentary seat, giving him the opportunity to launch a formal leadership challenge.
According to The Observer, Starmer was discussing the issue with his wife at his Chequers country residence before making a final decision, with senior Labour figures expecting a statement on his future as early as Monday.
A government source, however, reiterated that Starmer remains focused on his duties, pointing to his previous statements.
The British leader said on Friday that he would fight any challenge to his leadership and urged Labour not to tear itself apart through infighting. Starmer's popularity has plunged
Starmer led the centre-left Labour Party to a landslide election victory in 2024, but his popularity has since fallen sharply following a series of scandals and policy U-turns. Critics say many voters have concluded that he has failed to deliver the improvements in living standards he promised.
If Starmer were to resign or be forced out, Britain would have its seventh prime minister in just over a decade, the highest turnover in nearly two centuries. The rapid succession of leaders reflects growing public anger at successive governments' inability to improve public services and address issues such as illegal immigration.
According to a Reuters tally, more than 100 Labour lawmakers, around a quarter of the party's representatives in the House of Commons, have publicly called on Starmer to resign or set out a timetable for his departure.
The Observer, which did not identify its sources, reported that Starmer had concluded his position was no longer tenable after consultations with cabinet ministers, advisers, donors and trade union leaders.
Burnham, 56, is widely seen within Labour as the most likely successor to Starmer, either through a negotiated handover or a formal leadership contest.
Having established a strong power base as mayor of Greater Manchester, he comfortably defeated a challenge from Nigel Farage's right-wing populist party in Friday's by-election for a vacant parliamentary seat.
Although Burnham stopped short of launching a formal challenge, he used his victory speech to promise a new direction for the country. His allies have urged Starmer to step aside and hand over power voluntarily.
Former health minister Wes Streeting has also indicated that he would be prepared to challenge Starmer.
Meanwhile, The Times reported on Saturday that Burnham would dismiss Chancellor Rachel Reeves if he became prime minister, after advisers concluded that she did not represent a sufficient break from the current direction. Reuters said it could not independently verify the report.
Embattled British Prime Minister Keir Starmer will step down from his post, U.S. President Donald Trump posted on Sunday.
"Keir Starmer will resign as Prime Minister of The United Kingdom," Trump wrote on Truth Social. "He failed badly on two very important subjects- immigration and energy. I wish him well!"
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