Top sources in BJP said the party has already taken "an in principle" decision of not taking power and top leadership has already conveyed to the city unit to make preparations for polls soon.
"The party has decided to decline any offer of government formation. We will prefer going to polls," a top Delhi BJP leader said.
The political situation in the national capital was discussed at a meeting of top BJP leaders last evening where it was dominant view that the party should go for polls.
Government sources said the Lt Governor, who is holding talks with all three parties BJP, Congress and AAP to explore government formation, will take a final decision on the political situation by this evening.
The last date of filing of nominations for bypolls in three assembly constituencies in Delhi is November 5 and if there was no possibility of government formation, then LG may recommend dissolution of Delhi assembly "at the earliest" so as to avoid the bypolls, they said.
BJP sources said RSS has also conveyed its view that BJP should not form government adopting any "unfair means".
Earlier in the day, Delhi BJP chief Satish Upadhyay called on Jung and the party described it as as an "informal" meeting.
Upadhyay is understood to have conveyed BJP's view on the political situation to Jung.
Meanwhile, BJP central leadership has imposed a gag order on party leaders asking them not to speak to the media without authorisation.