LONDON- British lawmakers will on Tuesday try to stop Prime Minister Boris Johnson from pursuing what they cast as a calamitous no-deal Brexit, a challenge a senior government source said would prompt him to call for a snap election on Oct. 14.

More than three years since the United Kingdom voted to leave the European Union in a referendum, the outcome of the Brexit crisis remains uncertain with a range of options from a turbulent no-deal exit to abandoning the entire endeavour.

Johnson implicitly warned lawmakers on Monday that he would seek an election if they tied his hands, ruling out ever countenancing a further delay to Brexit, scheduled for Oct. 31.

That sets up an historic Brexit showdown between prime minister and parliament in a country once touted as a confident pillar of Western economic and political stability. Sterling flirted with some of the lowest levels since 1985.

An alliance of opposition lawmakers and rebels in Johnson's Conservative Party will use parliament's first day back from its summer break to launch their attempt to block a no-deal exit. They are confident of victory.

"The priority is to prevent a no-deal exit from the EU on the 31st and we'll see what happens after that," opposition Labour Party leader Jeremy Corbyn said.

"Let's see what happens after this legislation has gone through," Corbyn said. "And if an election is called, I am absolutely ready to fight it."

In the eye of the Brexit maelstrom, opposition parties could try to prevent Johnson calling an election - which requires the support of two-thirds of lawmakers - until they have passed their bill blocking a no-deal Brexit.

The pound, which has gyrated to the rhetoric of Brexit since the 2016 referendum, fell to as low as $1.1959 GBP=D3 . Barring the October 2016 'flash crash' when sterling momentarily tanked to as low as $1.15, the pound has not regularly traded at these levels since 1985. 

 

BREXIT CHESS

The European Union said it saw a no-deal Brexit on Oct. 31 as a "very distinct possibility" and urged its citizens and businesses to be prepared.

The Brexit referendum showed a United Kingdom divided about much more than the European Union, and has fuelled soul-searching about everything from secession and immigration to capitalism, empire and modern Britishness.

It has also triggered civil war inside both of Britain's main political parties as dozens of lawmakers put what they see as the United Kingdom's fate above that of party loyalty.

As Johnson played Brexit chess with lawmakers, opponents cast his order to suspend parliament as undemocratic and his threat to kick rebels out of the party as a perilous act that could endanger the future of the Conservative Party.

"I think we will have the numbers," one of the rebels, Conservative former finance minister Philip Hammond, said. "Prime Minister Johnson has always intended that there will be an election."

The rebel alliance will put forward an emergency motion for a vote on Tuesday allowing them to seize control of the parliamentary agenda the following day to try to pass legislation that would force Johnson to seek a three-month delay to Britain's EU exit.

Johnson raised the stakes, however, effectively turning it into a confidence vote by making clear that if the government were defeated, it would hold a vote on Wednesday to approve an early election, most likely to be held on Oct. 14.

"The prime minister's mood is determined," his spokesman said. "He wants to get on with delivering on the result of the referendum and the UK leaving the EU on October 31st, ideally with a deal."

His spokesman cast the rebel's bill as "a blueprint for legislative purgatory."

 

ELECTION

While the British leader said he did not want a snap election, he raised the prospect of one, and a senior government source said lawmakers should be aware it would be a consequence of their decision to vote against the government on Tuesday.

"I don't want an election. You don't want an election. Let's get on with the people's agenda," Johnson said at a hastily organised appearance outside Number 10 Downing Street.

Johnson has cast rebels as EU "collaborators" who are undermining the government's negotiating hand by blunting his threat of a no-deal Brexit. Johnson's foreign minister, Dominic Raab, criticised "shenanigans in parliament".

Rebels say the government wants an election but is trying to blame lawmakers for triggering one.

To hold an election, the government would need the backing of two-thirds of lawmakers in the 650-seat House of Commons. Johnson, whose Conservatives have seen an opinion poll bounce since he took office, has a working majority of just one seat.

An election could make a no-deal Brexit more likely, according to JPMorgan, as polling indicates Johnson could win.

"The effect of these developments, in our view, is to push up the probability of a general election occurring next month, and thereby to make no-deal more likely as of end October," JPMorgan said in a note to clients.

(Writing by Guy Faulconbridge; Additional reporting by Kate Holton and Michael Holden; Editing by Janet Lawrence) ((kylie.maclellan@thomsonreuters.com; +44 207 542 0401; Reuters Messaging: kylie.maclellan.thomsonreuters.com@reuters.net))