A general election could be called in March 2008, according to a letter sent to Labour activists by party chairwoman Hazel Blears.
Written on Labour party headed notepaper, it suggests Gordon Brown - who is widely expected to take over from Tony Blair as prime minister next summer - is planning a snap election to boost his mandate for power.
"In the new year we face real challenges, the election of a new leader, local elections and the need to prepare for the forthcoming general election, which may be less than 16 months away," Ms Blears wrote.
According to extracts in the Daily Mirror, she appealed for money to help fight the election campaign, and expressed concern about the threat from the Conservatives under leader David Cameron.
"The Tories are making a comeback, the next general election will not be easy, and a swing against Labour of just 1.3 per cent could see the Tories forming the next government," the letter said.
A Conservative spokesman said: "If people want change, they will have to vote for it.
"The sooner they get to vote on Blair and Brown's hospital cuts, failing schools and destroyed pensions the better."
The Liberal Democrats have already formed a committee to prepare for a possible snap election, and today chairman of campaigns Ed Davey said: "We are ready and waiting, and so are the British people.
"They deserve to deliver a verdict on Gordon Brown's abject failure in areas like the health service and the environment. We all want a chance to have a proper debate with the man who has signed all the cheques for the Iraq war."
Mr Blair said in September he would quit No 10 within a year. He has not explicitly endorsed Mr Brown as his successor for months, but the chancellor is so far only being opposed for the job by left-wing backbencher John McDonnell.