Rutte, whose centre-right coalition government has been in power since October 2010, said on Saturday that crucial talks on budget cuts had collapsed and new elections were inevitable.
The crisis jeopardises the chances of the Netherlands, a core eurozone member, meeting European deficit targets and approving a broader fiscal responsibility pact.
The Dutch cabinet was to decide today (23 April) what to do next and may offer to resign and call fresh elections.
Rutte's government has also been battered by international condemnation of an internet site launched in February by the Freedom party.
The site invites Dutch citizens to report nuisances caused by Europeans citizens coming from Poland, Romania and Bulgaria. Types of nuisance that can be reported include pollution, problems related to housing or simply competition on the job market.
A poll published on Sunday by Maurice De Hond, conducted after the budget talks collapsed, showed that no single party would have a majority if elections were held now.
Rutte's Liberals would win 33 seats in the 150-seat parliament, up from 31 currently, followed by the eurosceptic Socialist Party with 30 seats and the pro-Europe Labour Party with 24 seats.
Rutte's coalition partner, the Christian Democrats, and Geert Wilders' Freedom party, his main political ally until Saturday when Wilders refused to do a budget deal, have both slipped in the polls and would win 11 and 19 seats respectively.
De Hond's poll showed that a clear majority of Dutch people think the level of budget cuts demanded by the European Union is excessive.
Asked whether the Netherlands should cut less than the European Union wants, 57% of respondents agreed.
Supporters of the populist rightist Freedom Party and of the leftist Socialist Party were particularly set against cuts.
The poll showed that the Dutch were most strongly opposed to spending cuts that would have a direct impact on standards of living, 56% of respondents opposing the introduction of a new, modest prescription charge, and 47% opposing an increase in value added tax.
But there was less support for cuts to development aid, a key Freedom Party demand, or for measures against asylum-seekers. Only 21% of those polled were firmly opposed to increasing the pension age by one year to 66.