If confirmed, the result will be humiliating for May, who called a snap election in the hope of increasing her majority and strengthening Britain's hand in exit talks with the European Union. If she has failed, she could face pressure to resign.
``If the poll is anything like accurate, this is completely catastrophic for the Conservatives and for Theresa May,'' former Conservative Treasury chief George Osborne told ITV.
``Clearly if she's got a worse result than two years ago and is almost unable to form a government, then she, I doubt, will survive in the long term as Conservative Party leader.''
A party needs to win 326 seats in the 650-seat House of Commons to form a majority government. The Conservatives held 330 seats in the last Parliament, compared with 229 for Labour, 54 for the Scottish National Party and nine for the Lib Dems.
During the last election, in 2015, the Conservatives did better than the exit poll predicted, and senior Conservatives said they would take a wait-and-see approach.
``It's still very, very early in the evening,'' Northern Ireland Secretary James Brokenshire said. ``It's too early in the night to be drawing conclusions.''
The forecast is much better than expected for the opposition Labour Party, which had been expected to lose seats.
Labour economy spokesman John McDonnell, one of Corbyn's main lieutenants, urged caution.
``I'm a natural pessimist, and we'll see whether I'm an optimist in the morning,'' he said.
The result could also be bad news for the Scottish National Party, which is predicted to lose 20 of its 54 seats _ though the pollsters cautioned that there is a lot of uncertainty around the Scottish forecast.
A big loss could complicate the SNP's plans to push for a new referendum on Scottish independence as Britain prepares to leave the EU.
Results will come in overnight after an unsettled election held in the shadow of three deadly attacks in as many months.
May called the election seven weeks ago _ three years ahead of schedule and with her party was well ahead in the polls. She argued that increasing the Conservative majority in Parliament would strengthen Britain's hand in Brexit talks.
But things didn't go to plan.
Brexit failed to emerge as a major issue in the campaign, as both the Conservatives and Labour said they would respect voters' wishes and go through with the divorce.
Then attacks that killed 30 people in Manchester and London twice brought the campaign to a halt, sent a wave of anxiety through Britain and forced May to defend the government's record on fighting terrorism.
Eight people were killed near London Bridge on Saturday when three men drove a van into pedestrians and then stabbed revelers in an area filled with bars and restaurants. Two weeks earlier, a suicide bomber killed 22 people as they were leaving a concert in Manchester. Before the election, five people died during a vehicle and knife attack near Parliament on March 22.
Rachel Sheard, who cast her vote near the site of the London Bridge attack, said the election hadn't gone as expected _ and that it certainly wasn't about Brexit.
``I don't think that's in the hearts and minds of Londoners at the minute, (not) nearly as much as security is,'' said Sheard, 22. ``It was very scary on Saturday.''
May, who went into the election with a reputation for quiet competence, was criticized for a lackluster campaigning style and for a plan to force elderly people to pay more for their care, a proposal her opponents dubbed the ``dementia tax.'' As the polls suggested a tightening race, pollsters spoke less often of a landslide and raised the possibility that May's majority would be eroded.
In her final message to voters, May tried to put the focus back on Brexit.
``I can only build that better country and get the right deal in Brussels with the support of the British people,'' she said. ``So whoever you have voted for in the past, if that is the future you want then vote Conservative today and we can all go forward together.''
Corbyn, an old school left-winger widely written off at the start of the campaign, has drawn thousands of people to upbeat rallies and energized young voters with his plans to boost spending on health and education after years of Conservative austerity.
Corbyn told supporters at his final rally that Labour's campaign had ``changed the debate and given people hope. Hope that it doesn't have to be like this; that inequality can be tackled; that austerity can be ended; that you can stand up to the elites and the cynics. This is the new center ground.''
Security dominated the late stages of the campaign, after the attacks in Manchester and London. May said this week that she would consider rewriting human rights legislation if it gets in the way of tackling extremism.
Corbyn, meanwhile, accused Conservatives of undermining Britain's security by cutting the number of police on the streets.
While security was on many voters' minds, it was far from the only issue.
``It's important, but it's only one issue amongst several,'' said 68-year-old Mike Peacroft. ``I wouldn't necessarily say it's at the top. Obviously at my end of the (age) spectrum I'm more interested in things like pensions and so forth, NHS health care _ plus schooling, those are really my main concerns.''
