One of Boris Johnson’s ministers and most prominent leadership backers has informed the government he is intending to resign, Sky News understands.
Johnny Mercer will see the prime minister within hours to tender his resignation as Minister for Defence, People and Veterans.
This comes after weeks of unhappiness over slow progress of legislation designed to protect veterans.
Mr Mercer is understood not to have formally tended his resignation yet, and wants to explain his reasons directly to the PM.
Mr Johnson has previously succeeded in talking key figures in his administration out of resigning, including Lord Frost, his former Brexit negotiator who ended up with a promotion after threatening to walk.
However sources close to Mr Mercer have not denied he intends to resign.
Last week the House of Lords blocked government efforts to protect Armed Forces veterans and serving personnel from "vexatious" prosecution for historic alleged war crimes – the legislation championed by Mr Mercer.
Peers heavily defeated the government in demanding that war crimes, crimes against humanity, genocide and torture are all excluded from future legal safeguards for British troops fighting overseas.
Sky’s political editor Beth Rigby reports that Mr Mercer will stay in his role until the Overseas Operations Bill protecting soldiers from "vexatious" legal action passes through parliament, meaning he will resign later this week.
She said: "I understand that Mercer informed both the PM and [Michael] Gove about his decision to stand down privately head of making a public announcement and understand he’s furious that his courteousness in informing the government of his decision was returned with a leak."
Asked about Mr Mercer, Mr Johnson’s spokesman said: "I’ve seen there is speculation, and speculation is what it is at the moment.
"Johnny Mercer is a valued minister in the government and we have a good track record on delivering for veterans’ issues."
The spokesman added he was not aware of any conversations between Mr Mercer and the PM today.