The YouGov Plc study in the Times, based on a new model, showed the prime minister's party may fall short of an overall majority by 16 seats - a contrast from just a few weeks ago when a solid Tory victory was seen as a foregone conclusion.
Nationally, YouGov says its analysis suggests a hung Parliament, with Conservatives winning 311 seats out of the 650 up for grabs, while Labour wins 255. If Wednesday's poll had used the previous poll's methodology, it would have shown the Conservatives' opinion poll lead narrowing by 6 percentage points, Panelbase said.
May would be well short of the 326 seats needed to form a government in June, when formal Brexit negotiations are due to begin.
May also faced criticism for refusing to take part in a live television Wednesday night after Labour leader Jeremy Corbyn announced he would, after all, participate.
However, it has a very wide margin of error, saying the Conservatives could get anywhere between 274 and 345 seats meaning they could also increase their majority.
Bloomberg's U.K. Election Tracker shows that for the Labour Party to win a majority, it would need perhaps a 10-point lead, requiring a swing of 8 points since the 2015 election.
The Tories were projected to win 43% of the vote but lose 20 parliamentary seats and miss out on the sought-after landslide win predicted when May first called the snap election.
Support for the Liberal Democrats was unchanged at 7 percent, according to the poll taken between May 26 and June 1.More news: Mourinho restores Man United's winning feeling after Europa victory
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Sterling was hit after one poll yesterday showed the election could end in a hung parliament.
The Tories' lead has been slashed in the latest poll putting Prime Minister Theresa May just three points ahead of Jeremy Corbyn.
A "shocking" poll by YouGov shows that the elections in the United Kingdom will result in a loss of seats for the Conservative Party.
However, YouGov stated: "Please note these voting intention figures are from YouGov's conventional polling, not our new election model".
Speaking about the poll, Green Party co-leader Jonathan Bartley said: 'If we learned anything from the past two years it is that you can't predict what's going to happen.
YouGov chief executive Stephan Shakespeare said the data could change dramatically between now and June 8.
"The slide in the pound is another example of markets not being prepared for a close election, let alone a hung parliament", Sean Callow, senior currency strategist at Westpac Banking, told Bloomberg.