Since her party has only 318 MPs in the new Parliament, Mrs May has chose to rule with the support of a group of Northern Irish Protestants, who have 10 additional seats, and can bring the government's support beyond 326 MPs, the magic figure required for overall majority.
"She might start off doing that but the Conservatives might well replace her mid-stream", he said.
"She's staying, for now", the source told Reuters.
After speaking with Queen Elizabeth II to gain the monarch's approval, May announced in front of 10 Downing Street, "I will now form a government- a government that can provide certainty and lead Britain forward at this critical time for our country".
Now that Mrs May has reclaimed the prime ministership, however tenuously, the question becomes: what can she do with her limited mandate?
The centre-right, pro-Brexit Democratic Unionist Party's 10 seats are enough to give May's right-wing Conservatives a fragile but workable majority, which May said would allow her to negotiate a successful exit from the EU.
It was not immediately clear what the DUP's demands might be and one DUP lawmaker suggested support might come vote by vote. But May soldiered on Friday, re-appointing senior ministers to her Cabinet and holding talks with a small Northern Irish party about shoring up her minority government.
May said Brexit talks would begin on June 19 as scheduled, the same day as the formal reopening of parliament.
In the polls, the Scottish National Party won 35 seats, the Liberal Democrats 12 and the Democratic Unionist Party got 10. Despite Corbyn's strong call for her to step down she has remained firm in forming a coalition government.
The pound hit an eight-week low against the dollar and its lowest levels in seven months versus the euro before recovering slightly on news she would form a DUP-backed government.
"Brexit negotiations should start when United Kingdom is ready; timetable and European Union positions are clear". Following the news of a Conservative loss Labour Party leader Jeremy Corbyn called for May's resignation saying, "She's. lost Conservative seats, lost votes, lost support, and lost confidence". "I would have thought that's enough to go, actually, and make way for a government that will be truly representative of all of the people of this country".
The election's biggest victor was Corbyn, who confounded expectations that his left-wing views made him electorally toxic. "We need to take stock, and our leader needs to take stock as well".
Will Brexit negotiations be delayed?
The election shock is "yet another own goal" that will make "already complex negotiations even more complicated", said the European Parliament's top Brexit official, Guy Verhofstadt.
May's predecessor David Cameron sought to silence eurosceptic fellow Conservatives by calling the referendum on European Union membership, expecting Britons to vote to remain.
"The British political system is in total disarray". But EU Council President Donald Tusk said: "We know when they must end".
Norwegian Foreign Minister Boerge Brende said the outcome could mean a less radical split between Britain and the EU. May won the Conservative leadership without a contest, so the party will be keen to test her successor in a leadership race. Other Conservatives have emphasised the importance of migration controls. That's what we will deliver.
May had unexpectedly called the snap election seven weeks ago, three years early, polls predicting she would massively increase the slim majority she had inherited from Cameron. This constitutes more than half of all voters in the UK.
In contrast, Mr Jeremy Corbyn, the far-left opposition Labour leader who was widely perceived as unelectable, surprised voters with his ability to relate to ordinary people, and charmed them with promises of extra cash for health and social services.
When asked about her position, he said: "That remains to be seen".