More I think about it again, I thought about the July Crisis that happened triggering World War 1.
http://en.wikipedia.org/wiki/July_Ultimatum and I notice the similarities between the Austria-Hungary-Germany alliance and Chee Soon Juan. Basically it was the alliance's intention all along to go into war against Serbia, so when their heir to the throne was assassinated by Serbian nationalistic agents, they sent an the July Ultimatum to Serbia demanding that Serbia demanding a whole bunch of things which they very well know that is impossible for the Serbs to accept, then declaring war on Serbia after the Ultimatum was not completely accepted, thinking that they can put the blame on the Serbs for starting the war.
It does sound a lot like Theory A. Chee Soon Juan basically made an offer to the Worker's Party that he knows it is impossible for the Worker's Party to accept. He then goes ahead to compete in the by-elections, blaming the Worker's Party for causing the 3 corner fight for not accepting this "very reasonably offer made in the name of opposition unity".
We will see if the Punggol East voters will fall for this ruse.