Gordon Brown has secretly ordered a review of Labour’s organisation and instructed allies to begin raising funds as part of preparations for a general election this autumn.

A leading party official told The Times yesterday that Mr Brown had placed Labour on notice for a poll that could be held as soon as this October.

Martin Salter, a vice-chairman of the Labour Party, said: “I can confirm that the party has been put on alert for an early election that could take place as soon as this autumn.”

Private negotiations with Labour’s leading donors and its bankers have already started, in the clearest sign yet that Mr Brown is seriously considering taking advantage of a surge in the party’s opinion polls since he took office.

Labour hopes that speculation about an early election will heap pressure on David Cameron at a time when his leadership is coming under daily attack from his own side. The prospects of a poll this October should also help fundraising as well as ensure Labour’s own discipline, Mr Brown’s allies admit.

Nevertheless, Mr Brown – mindful of the need to maintain the credibility of the threat –has begun to take the concrete steps needed to pave the way for an autumn poll.

The Prime Minister ordered a complete review of Labour’s organisation before leaving for Washington this week. He has also stepped up the preparation of the party’s election manifesto, according to senior party figures.

Labour MPs are being told to spend the summer working on local campaigning before a national offensive against Mr Cameron’s Conservatives.

“The finances aren’t there yet but there are all sorts of discreet talks going on with bankers about loans and with donors about bringing forward cash they might have given next year to this,” said one senior Brown ally.

The key challenge for Labour in an autumn election would not be raising money, even though Labour still has debts of £25 million, but in recruiting experienced staff, selecting candidates and approving the manifesto in such a tight timetable, party insiders said. Labour has already bought sophisticated campaigning computer software to identify voters and communicate with members.

Donors have started to reemerge after Mr Brown’s move to No 10 and the announcement that no charges are to be brought after the police inquiry into cash-for-honours allegations, which scared off potential financial backers. Senior party figures are confident that more will follow as an election approaches, although they believe Mr Brown would prefer a mixture of private donors, unions and larger proportion of small donors, rather than relying on a few wealthy businessmen or union leaders to underwrite a campaign.

More pressing is the hiring of new staff with political experience, after a financial crisis, following the 2005 general election, forced Labour to cut its headcount from 291 to 158 last year. Job losses were particularly severe in regional offices, and staff are exhausted after preparing for May’s elections, running the leadership and deputy leadership elections and last month’s by-elections in Ealing Southall and Sedgefield.

“We would need to probably double in size, especially out there in the regions where they are really severely understaffed. Some offices are really shell offices,” one Labour source told The Times. “We would need to staff up pretty fast. It is not like banking. You need a level of institutionalised knowledge in the way to run an election. And people [being hired] have to give notice.”

A fast-track procedure would have to be imposed by the party’s national executive committee to replace the normal system for selecting parliamentary candidates and would require intense activity to be complete by October.

Similarly, Labour’s policymaking process would have to be truncated and a new process imposed for agreeing the party’s election manifesto, which would risk protests from local activists and from trade unions, who extracted a series of concessions towards the end of the previous Parliament in the so-called Warwick agreement. Their role in considering policy through Labour’s “partnership in power” procedure would be replaced by a series of rapid and probably tense negotiations over controversial parts of the manifesto.

Labour’s annual report, published last week, showed that membership had fallen to 182,370 at the end of last year. Party sources said it fell further to a low of about 177,000 before climbing slightly before the process to choose a new leader and deputy leader to about 180,000.

The party has begun to repay the £14 million in secret loans from wealthy supporters it used to underwrite its 2005 election campaign and in April paid back the £1 million including interest lent by Sir Christopher Evans, the biotech entrepreneur, who was one of those arrested during the police inquiry into cash-for-honours allegations. Labour has begun to repay Gordon Crawford, who lent £500,000, but party sources said that the remainder of lenders had agreed to reschedule their loans for later repayment.

Oct 18

–– Election day if Brown announces at the Labour Party conference that there is to be an autumn election. The standard general election gives 17 working days between the formal dissolution of Parliament and polling day

–– If, however, he chooses to wait a week and announces it as David Cameron is addressing the Conservative Party’s annual conference, polling day could be October 25

*Source: Election Timetables, House of Commons Standard Note, February 7, 2005

Times Recommends

• Charles blazes trail as sun king
• Thalidomiders win payout 50 years on
• Libel gag on talk of 'medical hurricane'