Eurosceptic ministers have been told not to vote for a rebel amendment demanding legislation to guarantee a referendum on Britain's EU membership.
Downing Street indicated that David Cameron was "relaxed" about the idea of Tory MPs attacking his Government's own Queen's Speech in the Commons lobbies.
At least 100 are tipped to back the move if the amendment is selected by Speaker John Bercow for debate on Wednesday, with cabinet ministers such as Ian Duncan Smith thought to be among them.
It is understood that free voting will be extended only to backbench MPs with ministers abstaining.
It remained unclear whether their parliamentary private secretaries - Commons aides to ministers - would be allowed to join the rebels.Conservative unrest over the European issue has been inflamed by the electoral success of the anti-EU UK Independence Party and Tory grandees advocating withdrawal.
Cameron has pledged to back a Conservative MP's EU referendum bill, as Cable labelled the move potentially 'damaging' for the country.
114 Conservative backbenchers have voted in favour of a eurosceptic motion to amend the Queen's Speech in defiance of the Prime Minister.
David Cameron has denied he has buckled under pressure from his backbench MPs over the EU debate.