Plans for an autumn general election were being stepped up last night after proposals to exclude all but millionaires from paying inheritance tax electrified the Tory conference.

Tax was thrown into the centre of the election battleground as Labour claimed that the Tories could not afford George Osborne’s proposal to raise the inheritance tax threshold from £300,000 to £1 million.

The plan, if enacted, would largely benefit homeowners in London and the South East worried about their children paying large amounts of tax. But the plan amounts to a tax cut for any household with an estate worth more than £300,000.

Tory sources pointed out that the rise would mean that someone with an estate worth £1 million or over would pay £280,000 less in tax, because at present they would pay tax at 40 per cent on the £700,000 difference.

The tax pledge came as the unions began to mobilise in preparation for a snap election, The Times has learnt. Labour has moved to ask the biggest unions to pay next year’s party affiliation fees now, bringing in £6 million at once, as well as activating their call centres this weekend. Some senior union sources believe Mr Brown will announce an election next Tuesday.

In a further sign that an election may be imminent the Electoral Commission is sending out pre-election advice to returning officers today, normally sent out after a general election is called. A spokesman for the Electoral Commission said that given the unusual circumstances it had decided to put the advice out immediately. “It is our decision, but councils are now making contingency plans and we are helping them to do this,” a commission spokesman said.

With election fever gripping all the parties, Mr Osborne’s dramatic pledge produced roars of approval in Blackpool from activists increasingly convinced they will be fighting an election within two weeks.

But the Labour “rebuttal” machine swung into immediate action with Alistair Darling alleging that Mr Osborne’s plan to raise the money by levying a £25,000 annual charge on 150,000 foreigners working in Britain but benefiting from tax loopholes did not add up.

While Mr Osborne claimed he could raise £3.5 billion by the charge on the so called “non-domiciles”, the Chancellor said that initial Treasury costings showed that he would raise a maximum of £650 million leaving him £2.9 billion short. “It is clear from the mistakes he has made today that the Tory party still fail the first test of a credible Opposition. Their sums simply do not add up.” There was a gaping black hole at the heart of Tory plans as only a small fraction had enough foreign investments to make it worth their while to pay the charge, Mr Darling said.

Thousands of others were doctors, nurses and City workers on lower salaries and not the millionaires targeted by the plan, he said.

As the rebuttals and counter-rebuttals flew between London and Blackpool the electioneering atmosphere heightened.

Union leaders have become convinced that Mr Brown is on the verge of calling an election. A union source told The Times: “There are regional offices in every town over 30,000. All have office space, phones, cars and as soon as an election is called there are plans that swing into place.

“They have been put on alert and told to prepare to activate the phone banks this weekend. They are planning for a big announcement.”

Unite, the biggest union, created after the merger of T&G and Amicus, sent a memo yesterday to all its staff, telling them to get ready for an election after its joint leaders Tony Woodley and Derek Simpson saw Mr Brown at Downing Street yesterday afternoon.

The unions make available their extensive network of regional offices to the party, along with staff phones, administrative support and transport. They run the party’s postal vote clearing centre and phone banks, as well as lending press officers and campaigners to the party.

Unite’s memo says that all officers should now be working to identify key seats where Unite will lead the campaign locally; finding workplaces for candidate visits; mobilising workplace reps for campaigning work; and collecting members’ e-addresses for e-mail campaigning.

Mr Osborne’s tax promises - including that houses for first-time buyers selling for less than £250,000 would be exempt from stamp duty and the new £25,000 nondomicile levy– will be at the centre of any campaign.

But a Labour spokesman said that the large majority of non-domiciled foreigners would not pay the charge because they would need to receive £62,000 in foreign income a year – meaning they would have to have foreign capital in excess of £1 million to raise that income – to make it worthwhile for them to pay the charge.

The spokesman said the Treasury’s initial estimate was that only 15,000 non-domiciles have income in excess of £62,000. If they paid the charge the sum raised would be £650 million.

Tens of thousands of current non-domicile workers in the UK are not highly paid and they would be much more likely not to come to the UK or opt for domicile status and pay far less in tax than £25,000 per year per person banked on by the Conservatives, the Labour spokesman said.

He added that the proposal also overestimated the number by assuming about 150,000 resident non-domiciles. The latest figures indicated there were only 114,000 registered.

Labour added that the plan gave a green light to the avoidance of UK tax, putting at risk the £4 billion a year currently paid in UK taxes by non-domicile residents.

The Conservatives hit back by accusing Mr Darling of “firing blanks”. They claimed that the Treasury’s own figures showed that the majority of non-domiciles would chose to pay £25,000 rather than bring all their foreign income onshore.

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