Greg Cook, a senior official at Labour's Millbank headquarters, warns in his report that Labour could lose 2,000 of the 6,000 seats it will defend at next May's local elections, which take place in Scotland, Wales, the English shire districts and in the metropolitan boroughs outside London.
Mr Cook's prediction is based on analysis of the 118 local authority by-elections which took place between 1 May and 31 August this year. Labour has made a net loss of 22 seats, the Tories have made a net gain of 14, while the Liberal Democrats are up 2 seats.
This points to a national share of the vote of: Tories 34 per cent, Labour 33 per cent and Lib Dems 29 per cent.
"The implications for 1999 are obvious," says the document. "Of the 118 by-elections held since May 1, 97 were in seats contested in 1995 where overall the Labour vote is 13 per cent down and the Tories 10 per cent up.
"Labour won 6,244 seats in the 1995 [local] elections, most of which are up for election again next year. A slump on this scale could lead to the loss of perhaps 2,000 seats.
"Labour is on a hiding to nothing in the 1999 local elections, defending seats which were won unexpectedly at the depths of the Tories' plight in a bad year for the Lib Dems."
The report says that this year's council by-elections "point to minor but real and increasing damage to Labour's local electoral position. Leaving aside the different circumstances of Scotland, there is now a pattern emerging of real vulnerability in the heartland urban areas and of Tory recovery in rural areas. The combination could lead to big losses next year.
"We have no reason, however, to think that this is the product of real disaffection, rather it is part of a normal cycle whereby establishment parties are there to be picked off."
The report provides further evidence of Labour's problems in Scotland, where the Scottish National Party has seen a resurgence since the Government's decision to set up a Scottish Parliament.
Labour's local by-election results in both Scotland and Wales are worse than average, and north of the border they are the worst in any part of Britain.
However, some academics attending the Labour conference in Blackpool doubted that the results next May would be as gloomy as Mr Cook predicts. One said: "Labour's losses may be nearer to 1,000 seats, although if there is a bad economic winter, they could move towards 2,000."
He added that the report was downbeat about Labour's showing in the by- elections since May, and that the Tories should be doing much better than they are.
Mr Cook says in his report: "It should be emphasised strongly that this is not a substitute for national opinion polls. It is highly unlikely that in general election terms the Tories are doing any better than they did in 1997."
But he says that analysis of council by-elections has tended to be a reasonable predictor of what could happen in a full set of local elections.Reuse content