Russia is headed for civil war or even a total collapse, according to a Federal Security Service (FSB) agent.
Chechen leader Ramzan Kadyrov could also take the opportunity to strike and grab power amid the chaos, they added.
The agent also indicated that losing the "Battle for Donbas" would add to instability in Russia and could lead to a coup or even further territorial loss.
The Kremlin has launched its latest attack in the eastern territories of Ukraine with Vladimir Putin battling to take control of the entire Donbas region.
But Ukraine continues to put up fierce resistance and is currently slowing down Russian troops as they advance from the east.
In a letter to a Russian human rights campaigner Vladimir Osechkin, the agent predicted that Putin's army will fail in achieving its objectives in Donbas.
“The current reality leaves the country with two options," he wrote.
“The first is a total collapse due to the full set of all wrong actions taken together. The second is a civil war.”
Ukrainian forces carrying out tactical retreats and launching counterattacks in the Kharkiv region, leading to heavy losses on Russian invaders.
The agent added to Mr Osechkin that Kadyrov is fully aware that civil war could break out and is carefully gathering his forces.
The insider predicts that the Chechen leader is patiently waiting for the chance to exploit the ensuing political turmoil and carry out his long cherished ambition of creating an "Emirate of the Caucasus."
He said: "There is reason to believe that Kadyrov is not only aware of the inevitability of a civil war in Russia, but is actively playing along the lines of a potential split.
"Kadyrov himself does not care about Ukraine, the Donbas, and this entire war. He has gone beyond these limits, he is already thinking in a different reality."
As many as 12,000 troops have been send from the Chechen Republic to fight alongside Russian forces in Ukraine, according to Russian state TV.
But these fighters were not Kadyrov's elite forces but simply "Chechen volunteers" including law enforcement workers, the agent claimed to Mr Osechkin.
He also predicted that Kadyrov will become "the main beneficiary of the military failure of the Russian Armed Forces".
Describing the upcoming conflict as a "Donbas meat grinder", the FSB insider said that Kadyrov is "guaranteed to keep his forces intact".
While the rest of Russian forces will be "heavily drained and exhausted" in any outcome of the battle.
He continued: "In general, Kadyrov cannot but realise that after the Donbas battle, he will retain the most powerful and combat-ready military force in the country.
"But then a big turmoil can begin, in which everything will be incomprehensible.
"By all indications, Kadyrov, like no one else, is preparing for this particular point, everything else is informational tinsel, designed to hide his true plans."
The insider also criticised Putin and accused him of sacrificing everything for the sake of his political ambitions.
He wrote: "The culmination of the Russian problem has now been created personally by Putin, already by the fact that he puts his political demands above any expediency: military, social, economic. We do not have a strategy.
"Two weeks ago, there was hope that the current crisis would force the top leadership of the country to take a responsible step back, assess the situation and look for real solutions to the current situation.
"But instead, we see the behaviour of a player who has lost his temper and is trying to recoup at any cost.
"And there is no one to stop him, and his environment indulges this. You should have seen how even ours grovel."
