Even his position as chairman of Breitbart News, a website he has referred to as one of his most effective "weapons," was being reviewed by the company's leadership, according to people familiar with the talks — a move that White House press secretary Sarah Huckabee Sanders publicly encouraged at Thursday's White House news briefing.
But it was the rare statement from Rebekah Mercer, daughter of investor Robert Mercer, that hit hardest and, combined with Trump's fury, has left Bannon isolated from the two power centers that elevated him from a fringe commentator to an office in the White House.
"My family and I have not communicated with Steve Bannon in many months and have provided no financial support to his political agenda, nor do we support his recent actions and statements," Rebekah Mercer said in a statement to The Washington Post.
Breitbart executives, along with Mercer, who holds a minority stake, discussed pushing Bannon out of the company he helped make famous, according to four people familiar with the discussions. Among their concerns in doing so is the reaction of hard-line conservatives, who make up much of the site's readership, and also of Bannon, who would be unlikely to leave quietly, the sources said.
Friends of the Mercers working at the White House privately shared their view that Bannon's ouster from Breitbart would be well-received by the president, who has been irritated for months with Bannon's rising profile even as the two continued to talk by phone. A Bannon representative declined to comment.
"I certainly think that it's something they should look at and consider," Sanders told reporters Thursday.
One person close to Trump said, "The president's take is that everyone has to now make a choice: 'It's me or it's Steve.' "
Lawyers for Trump have accused Bannon of breaking a confidentiality agreement by making critical comments about Trump and his family in a forthcoming book, "Fire and Fury: Inside the Trump White House," by Michael Wolff. The president said in a statement Wednesday that Bannon has "lost his mind" since leaving his perch at the White House in August.
Those remarks have effectively undermined Bannon's standing as leader in the motley movement that swept Trump into office, while giving ammunition to his foes in the Republican Party who have long warned that he will be an electoral liability.
"The base is owned and operated by Donald Trump," said Christopher Ruddy, a friend of Trump's who is chief executive of Newsmax Media. "Bannon was an interloper who didn't have as much control as people say he did and whose image was inflated by the media. His power came from riding the coattails of Trump, and the base will side with the president."
After leaving the West Wing, Bannon has tried to straddle a fine line as a hard-charging Trump advocate while cultivating his national stature as the master of his own political operation with distinct personal and ideological goals. People who work with Bannon acknowledged that it will be difficult for him to keep rallying the president's base in the current environment.
Bannon's foes were more blunt. "His only hook to Republican Party politics was his relationship with the president," said Josh Holmes, a former top aide to Senate Majority Leader Mitch McConnell (R-Ky.). "You saw how quickly everything dissolved after the president's statement."
The fallout extended to political groups that have worked with Bannon to boost anti-establishment Republican candidates across the country this year, such as U.S. Senate candidate Kelli Ward of Arizona.
Eric Beach, an adviser to both Ward and the Bannon-allied Great America PAC, said Thursday that Bannon and Ward's relationship was limited and not central to her campaign, even though Bannon has hosted her in Washington and spoke at a raucous rally for her in Arizona. Bannon, who has worked closely with Great America Alliance, a partner of the PAC, has no formal role with either group.
"I don't think there is any room for the palace intrigue," Beach said, saying the entire episode "hurts" the group's cause.
There were signs that other donors were cooling on Bannon's post-White House role as a fundraiser and gatherer of Republican money. Steven Law, the president of the Senate Leadership Fund, which opposes Bannon's projects, said several of his own donors who had previously been willing to entertain pitches from Bannon had decided to stop those conversations.
The unease extended to individual races. Michael Grimm, a former New York congressman running for his old seat after a felony conviction, had eagerly courted and received Bannon's support, posing for photos at the "Breitbart Embassy," Bannon's townhouse on Capitol Hill.
But Grimm quickly distanced himself from Bannon amid the uproar over the Wolff book and issued a statement denouncing the comments in the publication as "baseless" and "beyond disturbing." His advisers said his swift response was a necessary political move.
"Grimm turned to Steve not just for strategic advice but the imprimatur of the president, and the disagreement suddenly makes that far less legible" as voters evaluate candidates, said Michael Caputo, a Grimm adviser who previously worked on Trump's 2016 campaign. "Some candidates fear that the president will look unfavorably on them if they stay close to Steve."
In other quarters of the Republican Party, where the Breitbart website serves as a commons and Trump controversies are called "fake news," the unraveling of the Trump-Bannon relationship has not yet sparked wide aversion to Bannon.
Danny Tarkanian, a perennial candidate in Nevada and Trump booster challenging Sen. Dean Heller (R-Nev.), said Thursday, "If Mr. Bannon is willing to support me through his comments, his financial resources, or to come out and appear at a rally, I would welcome that support."
Tarkanian remains friendly with Bannon's circle and noted that he has conferred with Bannon adviser Andy Surabian "on numerous occasions," although Bannon has not formally endorsed Tarkanian and has courted others to run against Heller. Tarkanian maintained that he is a fervent Trump supporter and dismissed the suggestion that he may have to eventually choose a side.
"I don't disown people for political expediency, and I'm not going to get in the middle of that issue," Tarkanian said.
Bannon's influence on Capitol Hill is also under scrutiny. On Thursday, Bannon's allies said they were uncertain whether he would continue to be someone they sought out to help rally against illegal immigration and expel "dreamers" — young undocumented immigrants who were brought into the country as children and who were granted federal permits under an Obama-era program.
"Yesterday morning, he was key. Today, I'm not sure," said Rep. Steve King (R-Iowa), a hard-liner on immigration. "I'd like to see how it plays out over the next few days and see if he's willing to walk some of this stuff back. How he responds will determine his role."
As speculation about Bannon's fate gripped Breitbart, Bannon told several employees and outside supporters that he was intent on staying on as chairman and asked them to go about their work, people familiar with the discussions said. He made plans to host Breitbart's radio program on Sirius XM's Patriot Channel, according to two people familiar with those discussions.
Bannon called Trump "a great man" late Wednesday night on that show and said he supported him "day in and day out." Bannon's role as a radio broadcaster, which appealed to Sirius when the broadcaster brokered a significant programming deal with Breitbart last year, is a factor inside Breitbart as executives mull whether to ask Bannon to step down as chairman. Breitbart wrote last month that "Bannon's commitment to the Sirius XM radio platform . . . ensures that the conservative populist icon will have a significant presence."
After his dismissal from the White House in August, Bannon thrust himself forward on the national stage as the lead general in a war to destroy what he saw as a weakened Republican establishment in the House and Senate — a bloc he called a "globalist clique" that had "total contempt" for Trump's supporters.
He immediately took back control of Breitbart, launched fierce rhetorical attacks on Republican leaders, and last fall helped lead the charge to elect former Alabama state judge Roy Moore to the U.S. Senate, even after allegations surfaced of Moore having had improper sexual contact with teenage girls.
His ambitions have been extensive, mixing trips abroad to connect with global leaders and promote nationalist ideas with daily huddles with a stream of candidates and supporters at the "Breitbart Embassy." In October, Bannon went as far as announcing on Fox News that there should be primary campaigns against every Republican Senate incumbent except for Sen. Ted Cruz (Tex.).
Bannon's allies point to the decision of three incumbents — Sen. Jeff Flake (R-Ariz.), Sen. Bob Corker (R-Tenn.) and Sen. Orrin G. Hatch (R-Utah) — to retire instead of standing for reelection this year as evidence of his power to inject fear of the base into the Republican Party's national leadership.
But Bannon's plans for disruption have not quite come to fruition. Candidates to challenge Republican incumbents in Nebraska and Wyoming have yet to materialize, and there is no candidate yet recruited to take on former Republican presidential nominee Mitt Romney, who is expected to announce his Senate candidacy in Utah. A Bannon-backed candidate in Mississippi, Chris McDaniel, has slowed his preparations for a campaign against Sen. Roger Wicker (R-Miss.), according to people who have spoken with him.
Bannon in recent weeks had also met with leaders of the National Republican Congressional Committee and agreed to resist primary challenges in seats at risk for Democratic pickups next year.
Bannon allies say that he now sees the most opportunity for like-minded Republicans in Democratic-held Senate contests, including Indiana, Missouri, Montana and West Virginia. And he has groused to friends that it would be difficult to win in Nevada and Arizona against well-financed Democratic challengers this year — many of whom expect the left, not the right, to be energized in November.
"Days like this hit hard," said Sam Nunberg, a friend of Bannon's and a former Trump campaign adviser. "Steve has an emotional connection to the president and to the Mercers, and I'm sure this is hitting home."
But, he added, "It could still work out with the Mercers. The reality is, how can you really kick Steve Bannon out of Breitbart?"
Staff writers Josh Dawsey and Sean Sullivan contributed to this report.