That's the word from Politico.

Several Republican officials close to Fred Thompson’s presidential campaign said they expect the candidate will drop out of the race within days if he finishes poorly in Thursday’s Iowa caucus.

Thompson’s campaign, which last spring and summer was generating fevered anticipation in the media and with some Republican activists, has never ignited nationally, and there are no signs of a late spark happening here in Iowa, where even a third-place finish is far from assured.

This reality—combined with a fundraising drought—left well-connected friends and advisers of Thompson Wednesday evening predicting that he will pull the plug on hype and hope before the Jan. 8 New Hampshire primary.

According to sources, anything less than a solid third-place finish will lead the former Law & Order star to leave the race he entered to such great fanfare. And if this does happen, look for an endorsement of Senator John McCain on the eve of the New Hampshire primary, potentially boosting the candidacy of the former POW and perennial loose cannon, who has been making a strong move in the polls in that state.

All of this, of course, stands in sharp contrast with reports coming from some other sources, which show Thompson surging in Iowa.

The latest news from Iowa? According to Zogby’s latest—and I quote: “Sen. Fred Thompson…has seen a late-breaking surge.”

But is that surge enough, especially if Thompson has fallen short of his fundraising goals for the final quarter of 2007? Frankly, I don't hold out much hope for the Thompson campaign accomplishing the goal of a strong third-place finish. After entering with such great fanfare, Thompson just fizzled.

I'll let Mr. Curtis Mayfield have the last word on this one.

UPDATE: Well, maybe not.

The rumor that Fred Thompson will quit the Republican presidential race if he finishes poorly in Iowa is not only false: it rises to the level of a political dirty trick aimed at reducing Thompson-backers’ turnout in tonight’s Iowa caucuses.

The story, which began as a rumor and caught fire as a result of a piece in today’s Politico, said that Thompson was likely to quit after Iowa if he did poorly there, and might endorse Sen. John McCain before next week’s New Hampshire primary. The article painted a glum, almost resigned mood among Thompson’s inner circle.

Thompson and his top campaign advisor Rich Galen both denied the story’s claims today.

* * *

According to one report, Thompson’s top campaign advisor Rich Galen said, “I'm a Republican official in the Thompson campaign, and I'm denying it." Galen is also reported to have said that no one inside the campaign was a source for the story. "I can't put enough adjectives in front of the 'deny' to accurately describe how vehemently I'm denying the story." That, and other statements by Thompson himself today, leaves the Politico’s story out in the cold.

Sources told me that Thompson’s campaign was already moving elements to South Carolina where they expect to do very well. If Thompson finished at the bottom of the pack in Iowa -- which seems very unlikely -- he would have to reassess his overall chances. But that seems unlikely. And Iowa is not a determinative race for the Republicans. It is very likely to be of lesser importance than a host of others, as John McCain, Rudy Giuliani -- and Thompson -- are betting. A candidate could easily go from a defeat there to win the nomination.

Personally, this makes me very happy to hear. We Republicans need Fred Thompson in the race. He provides one more ideological configuration for voters to choose from -- and more to the point, seems to be every Republican's second favorite candidate if they are not a FredHead.