Odds on new general election shorten as Theresa May declared next Prime Minister

Betfair says the odds are now 5/2 that fresh elections will be called this year

Theresa May will become Britain's next Prime Minister on Wednesday (Reuters)

The odds of Britain having an early general election have dramatically narrowed after Andrea Leadsom announced she is pulling out of the Tory leadership race.

Theresa May is now set to become Prime Minister on Wednesday evening after the Energy Minister announced her withdrawal on Monday morning.

Betfair has shortened the odds of a general election being called before 2020 to 5/2 from the 5/1 it was offering over the weekend.

Ms May ruled out a second general election when she announced her candidacy on 30 June but has come under increasing pressure to pull the trigger.

Labour party’s election coordinator, Jon Tirckett, said it was important for the country to have a “democratically elected Prime Minister” - but instead he said Ms May’s election is a “coronation” by a small handful of MPs.

He said: “It is crucial, given the instability caused by the Brexit vote, that the country has a democratically elected Prime Minister. I am now putting the whole of the party on a General Election footing.

“It is time for the Labour Party to unite and ensure the millions of people in the country left behind by the Tories' failed economic policies, have the opportunity to elect a Labour government”.

But the odds for Labour are still not looking good with Betfair offering just a 7/1 chance of the party forming the next majority government and 11/4 of having the most seats - compared to 5/4 odds of an overall Conservative majority.

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Angela Eagle officially launched her leadership challenge against Jeremy Corbyn on Monday, saying these were “dark days” for the Labour party after he refused to resign despite losing a vote of confidence 172-40.

Both parties were thrown into disarray following the shock vote to leave the EU on 23 June.

The following morning Prime Minister David Cameron announced he would be stepping down after the party had appointed its successor - a vote which was scheduled to be announced on 9 September.

Meanwhile, Mr Corbyn’s “lacklustre” performance during the campaign - he refused to campaign alongside Mr Cameron and was accused of secretly supporting a Leave vote - led to an open revolt by his frontbench with more than 60 cabinet members, junior ministers and parliamentary private secretaries (PPS) resigning over the course of a week.

Tory MP and supporter of Ms Leadsom Andrew Bridgen told the BBC there will be “a temptation” for Ms May to declare a new election given the chaos on the other side of the floor.

He said: “I mean we think we have divisions inside our party but you only have to look across the chamber and see them actually at each other's’ throats.

“Whatever the Conservative party candidates may say to settle Conservative backbenchers with small majorities who maybe have only been an MP for just over a year, the temptation with Labour in the chaos that it is to go for a fresh mandate with a fresh leader and a new manifesto - I would personally find it irresistible”.

In order to call a new general election Ms May would have to get Parliament to revoke the law for fixed term parliaments passed by the previous Coalition government.