It decided to go ahead with the bill's third reading on Saturday, despite legal challenges.
If the Constitution Court rules against the measure, the Pheu Thai Party government could decide to go to the polls rather than fight on. Critics have sought a judicial view on the constitutionality of the bill.
The court could order the party dissolved and ban its executives in the event it finds the bill goes against Section 68 of the constitution, political observers say.
However, from the way deposed prime minister Thaksin Shinawatra sees it, a court vote against the bill would also represent a way out of the myriad problems facing the government, a Pheu Thai Party source said.
"If the court rules [against] the amendment which is now awaiting royal endorsement, the bill is considered dropped," the source said. "The government wouldn't care less. Actually, things will play into its hands.
"The government will have an excuse to dissolve the House and call snap elections. It is better than letting the public know the government can't stay because it is failing in its handling of the economy."
Prime Minister Yingluck Shinawatra is required to submit the bill for royal endorsement in 20 days.
She is expected to forward it for the royal endorsement tomorrow after the cabinet's secretary-general has completed checking it.
According to the source, fresh elections provide a solution. The government faces economic problems and more than a dozen petitions in the charter court and independent public agencies.
It is proposing another three charter amendments concerning Sections 68, 190 and 237, which are pending parliament scrutiny. The most contentious bill is the amendment to Section 68, which has drawn lawsuits from civic groups and senators.
The source said the ex-prime minister ordered the chief government whip and the party's legal team and strategic committee to press ahead with the third and final vote on the amendment bill regardless of the charter court's decision.
Thaksin is confident the Pheu Thai Party has all the resources it needs to win a mandate if fresh elections are to be called.
Even though there are concerns about the prospect of a party dissolution and a political ban, Prime Minister Yingluck is unlikely to be affected or held accountable. She has hardly attended the joint sitting of parliament to debate the charter amendment bill.
"It is a strategy of the party's legal team and strategic committee to keep the prime minister from troubles," the source said.
Even if the charter court rules the amendment bill is against the constitution, it is unlikely to conclude the sponsors of the bill had an intent to overthrow the constitutional monarchy or to seize power through unconstitutional means, the source said.
According to the source, the government is more concerned with the 2-trillion-baht borrowing bill which authorises the Finance Ministry to seek loans for infrastructure development projects.
The bill has passed its third reading in the House of Representatives and is pending Senate scrutiny.
It is believed the government has begun its talks with local and foreign investors about the huge funds that will enter the system.
"If the borrowing bill is shot down, it will ruin the government's credibility and its hopes of attracting major investments," the source said.
The opposition, which accuses the government of trying to circumvent budget control regulations, plans to petition the Constitution Court to rule on the loans bill. It claims these projects can be paid for through the normal budget cycle and that a special loans bill is not needed.
According to the source, the government faces a tough task in defending the borrowing bill before the court after its slow disbursements in the 350-billion-baht water management schemes.
In defending the executive decree seeking 350 billion baht in loans for water projects and flood rehabilitation schemes in the wake of 2011 floods, Finance Minister Kittiratt Na-Ranong claimed the need for urgency. The constitution permits a special borrowing law only in cases of urgency.
Eighteen months have lapsed and only 10 billion baht has been disbursed. The remaining funds will have to wait as 90% of the projects are new and will have to go through public hearings and environmental impact assessment studies.
"The government doesn't want to amend the charter but has to because it is part of playing politics. It needs the 350-billion-baht loan and the 2-trillion borrowing," the source said.
"If the borrowing bill is found against the charter, the government isn't legally required to take responsibility.
"But why should it stay on?
"It would definitely win the elections."