Forecasts produced by Labour officials, based on the results of this month's local authority elections, suggest that the party will win 34 Euro seats - compared with 62 in the last Euro elections five years ago.
"We expect to lose half our seats," one Labour source said yesterday.
The main beneficiaries will be the Liberal Democrats and the Tories, who look likely to do well enough to end speculation that William Hague will be ousted as leader.
As the parties start to launch their Euro campaigns, Labour is preparing to blame the losses on the introduction of proportional representation (PR). The last Euro elections in 1994 were fought under the first-past- the-post system used for Westminster.
But Labour officials fear they will do even worse than expected, citing three factors: many traditional Labour supporters may not bother to vote, a mini-revival by the Tories in England and a strong showing by Plaid Cymru in Wales.
The Labour forecasts were produced by Greg Cook, the polling expert at the party's Millbank headquarters, who worked out a region-by-region breakdown of this month's council elections in England.
The Euro elections will be fought on a regional list system, with people able to vote for one party rather than an individual candidate.
The Independent has added to Mr Cook's figures to calculate the likely Euro results throughout Britain.
Our projection takes account of the first vote cast in the elections for the Scottish Parliament and Welsh Assembly, when people had two votes. We have assumed that London - where there were no local authority elections this year - voted in line with the rest of England, and that there will be a 35 per cent turnout in the 10 June Euro poll, down slightly on the 1994 elections.
In 1994, Labour won 62 Euro seats, the Tories 18, the Liberal Democrats two and the Scottish National Party (SNP) two.
If this month's English council, Scottish Parliament and Welsh Assembly results are repeated, Labour would win 34 seats, the Tories 27, the Liberal Democrats 19, the SNP two and Plaid Cymru two.
However, the figures do not take account of the smaller parties, which may benefit from the new PR system, such as the Green Party, the Pro Euro Conservative Party and the UK Independence Party.
The analysis suggests that in England, Labour would win 28 seats; the Tories 25 and the Liberal Democrats 18. In Scotland, Labour would land four seats, the SNP two, and the Tories and Liberal Democrats one each. In Wales, Labour and Plaid Cymru would each win two and the Tories one.
Anne McElvoy, Review, Page 3